Gold prices maintained their record gains since the beginning of the week nearing $4,800 amid a weakening US dollar and signs of easing tensions in the Middle East.
At 9.40 am, gold prices were at $4,705, down 1.11% since it opened in early trading on Thursday in the Asian session.
Global market sentiment remained cautious as geopolitical factors and key economic data continued to be the main drivers of price movements. US President Donald Trump claimed that Iran had requested a ceasefire in a post on Truth Social.
However, a spokesman for the Iranian Foreign Ministry quickly denied the claim and described it as baseless, thus keeping geopolitical tensions at a high level.
Meanwhile, Trump is expected to deliver a prime-time speech on Thursday, a rare development that has the potential to influence market sentiment. The situation is becoming more critical as the Strait of Hormuz remains largely closed, putting pressure on global energy supplies and contributing to rising oil prices.
The surge in energy prices has raised concerns about inflation, prompting investors to reassess monetary policy expectations. The Federal Reserve is seen taking a cautious approach by keeping interest rates in a range of 3.50% to 3.75% after its meeting on March 17-18, 2026.
While the median dot plot projection still points to a 25 basis point rate cut by the end of 2026, there is a growing view among officials that no rate cut will occur this year.
The high interest rate environment continues to weigh on gold, although the precious metal remains a key hedge against geopolitical and inflationary uncertainty.
The lack of interest returns makes gold less attractive than higher-yielding assets, especially in an environment where rates remain high for longer.
In the near term, the market's attention is now shifting to several key economic data releases from the United States scheduled for release this week. Data such as initial jobless claims and the Non-Farm Payroll (NFP) report will determine the next direction for the US dollar.
If the data released shows weakness compared to expectations, it has the potential to weaken the value of the US dollar and subsequently support the rise in dollar-denominated commodity prices.
The market is currently sensitive to any new developments, whether from a geopolitical or economic data perspective. Short-term movements are expected to remain uncertain, with the direction largely dependent on the strength of the US dollar and the latest developments in the Middle East.
