Diplomatic progress between the US and Iran weakens the dollar, lifting gold prices amid Fed policy expectations and geopolitical risks.
Gold (XAU/USD) rose to a four-day high of $4,580 in Asian trading Monday, supported by hopes of a US-Iran peace deal that weighed on the US dollar. Reports of a potential 60-day ceasefire and reopened Strait of Hormuz boosted investor sentiment, easing inflation concerns and pushing Treasury yields lower.
The dollar’s decline was limited by persistent Fed rate-hike expectations and unresolved US-Iran tensions, capping gold’s upside near $4,450 resistance. Markets remain cautious as key disagreements over Iran’s nuclear program and ongoing US sanctions could derail progress.
Thin liquidity due to global market closures amplified moves, while lower crude oil prices further reduced inflationary pressures, supporting non-yielding assets like gold.