Gold (XAU/USD) traded slightly lower around $4,155 an ounce in early Asian trading on Monday as investors continued to assess the latest developments in peace talks between the United States (US) and Iran in Switzerland.
At 10.15 am, gold was trading at $4,184, up 0.68% since it opened early Monday in Asian trading.
Market sentiment remained cautious after US President Donald Trump warned that military action against Iran could be considered if Hezbollah continues to launch attacks on Israel. Company financing
The statement increased geopolitical uncertainty and raised questions about the viability of negotiations between Washington and Tehran.
In response, Iranian representatives reportedly temporarily suspended high-profile talks with the US. However, sources familiar with the developments said that the negotiation process is still ongoing despite the escalating diplomatic tensions.
At the same time, the rise in gold prices was also limited by the strengthening US dollar. This sentiment was driven by the stance of the Federal Reserve (Fed) which is seen as still inclined to maintain tight monetary policy, thus reducing the attractiveness of gold as a non-yielding asset.
Goldman Sachs also revised its gold price forecast to $4,900 an ounce by December 2026, lower than its previous target of $5,400 an ounce.
The revision came after the investment bank no longer expects any interest rate cuts by the Fed this year.
