XAU/USD falls despite easing US-Iran tensions as traders focus on oil-driven inflation risks and delayed Fed rate cuts.
Gold prices extended losses on Wednesday, with XAU/USD dipping to $4,440, its lowest level since March 30. The decline comes despite cautious optimism over US-Iran negotiations, which eased fears of further Middle East escalation after Iran’s Revolutionary Guard downplayed the likelihood of renewed conflict.
Markets had anticipated a rebound in gold amid softer USD and oil prices, but traders shifted focus to inflation risks tied to energy costs. Expectations that the Federal Reserve and other central banks may delay rate cuts weighed on non-yielding assets like gold.
US President Joe Biden’s cabinet meeting later Wednesday could provide fresh updates on Iran talks, though gold’s muted reaction suggests limited near-term upside. Diplomatic progress has yet to offset macroeconomic concerns.