XAU/USD holds firm as progress in US-Iran negotiations offsets pressure from rising expectations of a December Fed rate increase.
Gold (XAU/USD) remains flat near $4,190 in early Asian trading as investors weigh US-Iran peace talks against hawkish signals from the Federal Reserve. Negotiations in Switzerland have shown progress, with Iran agreeing to reinstate IAEA inspectors, though tensions flared over the Strait of Hormuz closure last weekend.
Markets are pricing in an 89% chance of a Fed rate hike in December, up from 61% before last week’s FOMC meeting. Higher interest rates typically weigh on gold, which does not yield interest, though geopolitical risks provide support. Saxo Bank noted energy price volatility could further influence gold’s short-term trajectory.
Traders are closely monitoring both the Fed’s policy stance and developments in the Middle East, where oil supply disruptions remain a key risk factor for the precious metal.