XAU/USD dips to $4,070 as progress in US-Iran negotiations reduces energy-driven inflation concerns and Fed rate hike bets.
Gold prices fell to near $4,070 in early Asian trading Wednesday as diplomatic progress between the US and Iran eased geopolitical risks. Reports indicate Washington and Tehran may reach an agreement to reopen the Strait of Hormuz, reducing fears of energy supply disruptions and inflationary pressures.
Markets had priced in a nearly 60% chance of a Fed rate hike in September, according to the CME FedWatch tool. Cooling Middle East tensions could lead traders to scale back expectations for further monetary tightening, potentially supporting non-yielding assets like gold.
Despite optimism, uncertainty persists as no direct US-Iran talks have occurred. Qatar’s Foreign Ministry noted draft agreements are circulating, but final resolution remains elusive. Traders are also eyeing Friday’s US employment data for further Fed policy clues.