Gold prices continued their downward trend after almost reaching $4,800 after the agreement between the US and Iran appeared to be fruitless, with both sides vowing to launch military strikes in the near future.
At 9.15 am, gold prices were at $4,648, down 0.04% since it opened in early trading on Tuesday in the Asian session.
A report by the Wall Street Journal revealed that the US military is preparing for a possible attack on energy targets in Iran.
The development comes as Donald Trump increased pressure with statements that Iran could be defeated in a short time, reflecting the escalating level of geopolitical tensions.
The deadline previously set for April 6 has been postponed to April 7 at 8:00 pm Eastern time. The postponement depends on whether Iran meets key US demands, including the reopening of the strategic Strait of Hormuz route, which is the heart of global oil trade.
Meanwhile, Iran rejected a ceasefire proposal being pursued by several countries including Pakistan, Egypt and Turkey.
The proposal was intended to create a 45-day lull as an initial step towards resolving the conflict, but the failure to reach an agreement further increases the risk of global energy market volatility.
On the economic front, US service sector activity is showing signs of slowing. Data from the Institute for Supply Management showed that the Services PMI fell to 54 in March from 56.1 previously, although still exceeding market expectations.
At the same time, the price paid component jumped to its highest level since October 2022, driven by rising energy costs.
The labor market also provided a positive surprise when Nonfarm Payrolls (NFP) data recorded an increase of 178 thousand new jobs, far exceeding expectations.
However, a downward revision for February of -133 thousand makes the average job growth for the first three months more moderate, around 68 thousand.
The unemployment rate also fell to 4.3%, lower than the Federal Reserve's target of 4.5% for 2026. This development reduced expectations of monetary policy easing in the near future, with the market now seeing interest rates likely to remain steady throughout the year.
Market focus will next be on several important data points including Durable Goods Orders, Federal Open Market Committee (FOMC) meeting minutes, economic growth data, Initial Jobless Claims as well as inflation figures which will be indicators of the direction of US monetary policy.
