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Hawks in Washington curb gold rally despite easing Iran tensions

Gold prices moved into a sustained advance amid US‑Iran talks in Switzerland. Investors actively bought precious metals as they sought a balance between falling geopolitical tensions and the Federal Reserve’s hawkish rhetoric.

Spot prices rose 1.1% to $4,204.34 an ounce, while US futures increased 1.2% to $4,222.42. Last week, the metal struggled, losing 1.4% and closing with a decline for the third session in a row.

The driver of the reversal was a long‑awaited diplomatic breakthrough. Iranian Foreign Minister Abbas Araghchi said there were significant moves at four-party meetings. Mediators from Qatar and Pakistan confirmed that negotiators had agreed on a road map toward a broader accord. The technical details are to be settled in the coming days.

The prospect of peace and the removal of the threat of global energy supply disruptions immediately cooled oil markets. Brent surrendered its morning gains despite ongoing tensions in the Strait of Hormuz. Falling oil prices eased investors’ fears of a fresh inflationary surge. The market priced in a lower likelihood that the Fed would need to tighten policy urgently because of costly energy. This fact supported gold prices.

Still, the euphoria is being constrained by US regulators themselves. After last week’s meeting, the Fed retained a hawkish stance, signaling that rates may remain high because of stubborn inflation. ING analysts say that geopolitics will continue to underpin a baseline interest in bullion, but high borrowing costs in the US will cut off gold’s path to a rapid rally in the near term.

The dollar index remains close to 13‑month highs. All eyes are now on the personal consumption expenditures (PCE) index in the US. Its publication this week should give markets fresh clues about the Fed’s plans.

On the wave of broad positive sentiment, other precious metals posted even stronger moves: silver rose 2.2% to $66.36 an ounce and platinum jumped 11% to $1,683.39.

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