XAU/USD gains modestly as easing US-Iran tensions and a 5% drop in crude oil reduce Fed rate hike bets and pressure the USD.
Gold (XAU/USD) opened higher but failed to break above $4,100 as investors awaited the Federal Reserve’s policy meeting starting Tuesday. The metal found support from a weaker US Dollar (USD), driven by revived US-Iran diplomacy and a 5% decline in crude oil prices.
The pause in US airstrikes against Iran, following 13 consecutive nights of strikes, fueled hopes for de-escalation. A senior Iranian official confirmed Tehran would halt attacks if the US reciprocated, easing geopolitical risks. Lower oil prices also reduced inflation concerns, prompting investors to scale back expectations for immediate Fed rate hikes.
US Treasury yields dipped modestly, further pressuring the USD and providing a tailwind for gold. However, caution ahead of the FOMC meeting limited bullish momentum in the non-yielding asset.