Global gold prices are moving in a narrow range around $4,500 an ounce due to market uncertainty over the progress of ceasefire negotiations between the United States and Iran. This situation has caused traders to continue to speculate on the direction of interest rates and the strengthening of the US dollar.
The latest report states that Iran is evaluating a draft US proposal that was reported to have succeeded in narrowing the gap between the two parties. However, the negotiations are still deadlocked due to the issue of Tehran's uranium stockpile and the dispute over the implementation of a toll system in the Strait of Hormuz.
Concerns about the closure of the Strait of Hormuz have triggered high inflation expectations due to a surge in energy costs. This signal has prompted speculation that the Federal Reserve (Fed) and global central banks are likely to raise interest rates to control price pressures.
Commerzbank AG said the Fed meeting minutes revealed that monetary policy tightening will continue if inflation fails to fall to the 2% target level. Any new tensions in the Middle East risk triggering a price correction and further declines in the gold market.
In London, spot gold fell 0.4% to $4,522.96 an ounce, while silver fell 1% to $75.93 an ounce, in line with the declines in platinum and palladium. By contrast, the Bloomberg Spot Dollar Index edged up slightly on a shift in investor sentiment.
