Gold (XAU/USD) recovers some ground on Monday after sliding to its lowest level since March, as traders assess fresh geopolitical developments in the Middle East.
However, hawkish Federal Reserve (Fed) expectations continue to cap the upside
At the time of writing, XAU/USD is trading around $4,330 after hitting an intraday low of $4,268, a level last seen on March 23. Iran and Israel exchanged fire over the weekend for the first time since the ceasefire announced in April. The renewed hostilities have dimmed hopes for a near-term peace deal in the Middle East.
US President Donald Trump tried to calm the situation, posting on Truth Social that, “Both sides, Israel and Iran, are looking to do an immediate CEASEFIRE! Final negotiations on ‘Peace’ are proceeding.” Trump also warned that the US naval blockade of Iranian ports would remain “in full force and effect” until a final agreement is reached. Meanwhile, Iran’s armed forces announced the end of military operations against Israel, according to Fars News Agency, and said it would respond more forcefully to any future Israeli attacks on Lebanon.