XAU/USD gains after a US-Iran agreement reduces inflation fears and lowers expectations for a December Fed rate increase.
Gold prices (XAU/USD) edged higher in early Asian trading Tuesday, extending gains after the US and Iran finalized a framework deal to end hostilities. The agreement eased inflation concerns by reducing risks to energy supplies and Treasury yields, bolstering demand for the non-yielding metal.
Traders slashed bets on a Federal Reserve rate hike in December to 58% from nearly 70% last week, according to the CME FedWatch tool. Economists anticipate the Fed will hold rates steady at 3.50%-3.75% in Wednesday’s policy decision as it assesses the economic impact of recent energy price volatility.
The deal’s announcement weighed on the USD and oil prices, further supporting gold’s rally. Technical charts show XAU/USD remains below its 100-day simple moving average, signaling a cautious near-term outlook.