XAU/USD gains ground after a U.S.-Iran peace deal reduces safe-haven demand for the dollar amid Fed rate hike expectations.
Gold prices remained above $4,300 during Thursday’s Asian session, supported by a weaker U.S. dollar following a U.S.-Iran peace agreement. The deal, signed electronically by leaders of both nations, aims to end hostilities and reopen the Strait of Hormuz, easing geopolitical tensions and reducing demand for the safe-haven USD.
The Federal Reserve’s hawkish stance on Wednesday had initially lifted the dollar, as policymakers signaled higher rates for longer. The Fed kept its benchmark rate at 3.5%-3.75% but projected a year-end rate of 3.8%, up from March’s 3.4% forecast. Markets now price an 85% chance of a 25-basis-point hike in December, pushing Treasury yields higher.
Despite the Fed’s tone, the Iran deal’s positive sentiment outweighed dollar strength, keeping gold prices elevated near $4,300.