XAU/USD rebounds from a one-week low as a ceasefire eases safe-haven demand for the USD, though geopolitical risks persist.
Gold prices climbed to $4,475 during Asian trading on Thursday, recovering most of the previous session’s losses. The rebound followed a truce between Israel and Lebanon, which triggered profit-taking in the US Dollar and supported the non-yielding metal.
The ceasefire, brokered through US-led talks, remains contingent on Hezbollah’s withdrawal from southern Lebanon. However, stalled US-Iran negotiations and renewed Middle East tensions continue to underpin geopolitical risks, capping USD downside. Elevated oil prices and inflation concerns also temper aggressive bets on gold.
Markets reacted cautiously, with the USD pulling back from its recent highs but remaining near multi-week peaks. The resolution’s fragility and ongoing hostilities limit the scope for a sustained gold rally.