Gold prices declined in the European market on Tuesday, extending losses for the second consecutive day and moving further away from a four-week high. This comes amid ongoing correction and profit-taking, coupled with pressure from a rising U.S. dollar in the foreign exchange market.
The continued closure of the Strait of Hormuz by Iran and the ongoing U.S. blockade of Iranian ports have stalled talks between the two nations. This adds difficulty to convening the second round of peace negotiations in Pakistan before the ceasefire agreement expires tomorrow, Wednesday.
Price Overview
– Gold Prices Today: Gold metal prices fell by approximately 1.0% to ($4,772.91), from an opening level of ($4,820.41), and recorded a high of ($4,833.35).
– Upon price settlement on Friday, gold prices lost about 0.25% due to correction and profit-taking from a four-week high of $4,890.78 per ounce.
The U.S. Dollar
The dollar index rose 0.25% on Tuesday, resuming the gains that had temporarily paused in the previous session, reflecting the renewed ascent of the American currency against a basket of major and minor currencies.
As is well known, the rise in the U.S. dollar makes dollar-priced gold bullion less attractive to buyers holding other currencies.
This rise is driven by renewed safe-haven buying of the U.S. dollar amid the state of deadlock surrounding the second round of peace negotiations scheduled to be held in Islamabad.
Iranian War Updates
– The U.S. delegation, led by Vice President JD Vance, has not yet arrived in Pakistan to participate in the new round of peace negotiations.
– The Iranian Foreign Ministry announced it has “no plans” at this moment to participate in this round.
– International and regional parties are pressuring Tehran to join the peace negotiations before the two-week ceasefire expires tomorrow, Wednesday.
Global Oil Prices
Global oil prices rose by approximately 1% on Tuesday, extending gains for a second consecutive day amid renewed fears of supply disruptions from the Arabian Gulf region, particularly following the re-closing of the Strait of Hormuz.
The rise in global oil prices renews concerns over accelerating inflation, which could prompt global central banks to raise interest rates in the near term—a sharp pivot from pre-war expectations of rate cuts or prolonged pauses.
U.S. Interest Rates
– Kevin Warsh, Donald Trump’s nominee for Federal Reserve Chair, will testify before lawmakers at a Senate hearing on Tuesday, stating he is “committed to ensuring the full independence of monetary policy.”
– According to the CME Group’s FedWatch tool: the probability of keeping U.S. interest rates unchanged at the April meeting is stable at 99%, while the probability of a 25-basis-point hike stands at 1%.
– Investors are closely following the release of more U.S. economic data to re-price these probabilities.
Gold Performance Expectations
Kyle Rodda, an analyst at Capital.com, said: The next news is whether the talks will be held in Islamabad, and if they are, whether the ceasefire will be extended or, better yet, a peace agreement reached.
Rodda added: If these things happen, gold is likely to receive strong support given the drop in oil prices; if they do not, we could see some volatility return to the market.
SPDR Fund
Gold holdings at the SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, decreased on Monday by 0.86 metric tons, bringing the total down to 1,059.76 metric tons from 1,060.62 metric tons (which was the highest level since March 19).
