XAU/USD trades near $4,470 as hawkish Fed expectations and US-Iran tensions lift the USD to six-week highs.
Gold prices linger near their lowest levels since late March, trading around $4,470 as the US Dollar (USD) extends gains to a six-week peak. The commodity faces pressure from rising Fed rate hike bets and persistent geopolitical risks, particularly around US-Iran negotiations.
Investors remain cautious amid stalled diplomacy over Iran’s nuclear program and control of the Strait of Hormuz. While progress in talks has been reported, skepticism over a lasting deal keeps the USD supported as a safe-haven asset. Meanwhile, elevated crude oil prices near monthly highs fuel inflation concerns, reinforcing expectations for a more hawkish Fed.
Traders now price in over a 55% chance of a 25 basis point Fed rate hike, according to the CME Group’s FedWatch Tool, further weighing on non-yielding gold.