Gold fluctuates amid dollar weakness and hopes of calm economy

Gold prices fluctuated – today, Monday – amid a decline in the US dollar, at a time when reports of a new Iranian proposal to end the war with the United States raised hopes of calming tensions in the Middle East.

By 08:00 GMT, gold rose in instant transactions by 0.04%, reaching $4,713.54 per ounce, before returning to decline again, at the time of writing the report.

The precious metal ended last week with a decline of 2.5%, ending a 4-week winning streak.

US gold futures for June delivery also fell to $4,722.9.

The support for the precious metal came from the decline in the dollar, following a report stating that Iran had presented, through Pakistani intermediaries, a new proposal to the United States that included reopening the Strait of Hormuz and ending the war, which restored some optimism to the markets.

Kyle Rodda, chief financial markets analyst at Capital.com, said that investors are closely monitoring any potential progress in the talks between Washington and Tehran, considering that this will be “the biggest driver of gold prices in the coming period.”

In this context, US President Donald Trump said that Iran can communicate if it wants to negotiate, stressing at the same time that it “will never possess a nuclear weapon,” while Tehran stressed the need to remove obstacles, including the blockade imposed on its ports, to reach an agreement.

The prospects for stopping the war are still unclear, after Trump canceled a scheduled visit by American envoys to Pakistan, which plays the role of mediator in the talks, in a move that was considered a new setback to the path of calm.

Keep an eye on interest rates

Investors are now awaiting the decision of the Federal Reserve (the US central bank) on interest rates, which is expected to be issued on Wednesday, amid expectations that monetary policy trends will play a decisive role in determining the path of gold during the coming period.

Kyle Rhoda indicated that the Fed’s decision may be supportive of gold or put additional pressure on it, depending on whether the bank will keep its monetary policy unchanged in light of inflationary fears related to the energy crisis.

Other precious metals

• Silver rose 1% to $76.45 an ounce.
• Platinum increased 0.7% to $2,025.20.
• Palladium fell 0.2% to $1,493.50.