Gold prices are falling as European trading gets underway. Mixed signals regarding the progress of talks between the US and Iran have dissipated some optimism over the possibility of a near-term end to the conflict and the normalisation of maritime traffic through the Strait of Hormuz. This has enhanced the US dollar’s safe-haven appeal, weighing on the precious metal. At the same time, the uncertainty triggered an uptick in oil prices, increasing inflationary fears and reinforcing hawkish Fed expectations, creating an additional headwind for non-yielding gold. Against this backdrop, traders will remain alert to new developments in the negotiations between the US and Iran, while also looking ahead to the release of US PCE inflation data on Thursday. PCE is the Federal Reserve’s preferred measure of inflation, and the figures have the potential to influence expectations regarding the Fed’s monetary policy, potentially impacting gold prices.
Ricardo Evangelista, ActivTrades
Source: ActivTrader
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