Gold (XAU/USD) loses ground on Tuesday as the US Dollar (USD) and Oil prices rebound after renewed US military strikes in southern Iran dampen hopes for a quick end to the Middle East war.
At the time of writing, XAU/USD is trading around $4,511, easing from an intraday high of $4,580
The US Central Command said on Monday that US forces carried out “defensive strikes” in southern Iran targeting missile sites and Iranian boats allegedly attempting to place naval mines near the Strait of Hormuz. Meanwhile, Iran’s Islamic Revolutionary Guard Corps (IRGC) said it had downed a US MQ-9 Reaper drone after it entered Iranian airspace. The fresh military developments came as the United States (US) and Iran continue working toward a deal that could extend the ceasefire by 60 days and reopen the Strait of Hormuz, while negotiations over Iran’s nuclear program would continue.
Iran’s Tasnim News Agency, citing a source close to the negotiation team, reported that Tehran wants the United States (US) to release $24 billion in frozen Iranian funds as part of a potential deal. Iran is also seeking at least half of that amount to be released immediately after the agreement is announced. Lingering uncertainty surrounding the negotiations keeps market sentiment cautious, leaving Gold largely range-bound near recent lows, as a firmer US Dollar and higher-for-longer interest rate expectations continue to limit the upside.