Early Progress in U.S.-Iran Talks as Gold Stabilizes Around $4,188
Alina Collins
US-Iran negotiations show early signs of détente and spot gold has steadied near $4,188 per ounce, but bullion is still down roughly a fifth since the war broke out in late February — caught between easing geopolitics and rising rate expectations.
How far have US-Iran talks actually got?
Vice President Vance called last weekend's meetings "very, very productive"; Iranian officials confirmed progress.
The two sides have set up a direct communication channel between Tehran and Washington, aimed at ensuring safe passage through the Strait of Hormuz.
The US Treasury issued a 60-day licence letting Iran sell some oil on the international market. This means → Washington is using oil exports as a bargaining chip, offering goodwill while talks continue.
If tensions are easing, why hasn't gold rallied?
Spot gold traded at $4,188.91/oz as of 8 a.m. Singapore time, roughly flat. The day before it rose nearly 1%, snapping a three-session slide.
Since the war began in late February, gold has fallen about one-fifth; silver has dropped more than 30%.
In plain terms = war should lift gold, but the near-closure of the Strait of Hormuz → higher energy prices → rising inflation → markets pricing in rate hikes. Higher rates are directly negative for gold, which pays no interest — that force has overwhelmed safe-haven buying.
What role are the Fed and the dollar playing?
New Fed Chair Kevin Warsh sent a hawkish signal last week, further weighing on precious-metals sentiment.
The dollar has gained more than 1% since the last Fed meeting. This means → a stronger dollar raises the cost of holding dollar-priced gold, suppressing demand.
Pepperstone analyst Ahmad Assiri noted the dollar is "the dominant driver in the current environment."
What do technicals and flows say?
StoneX head of EMEA and Asia market analysis Rhona O'Connell wrote: "Gold and silver remain hostage to external factors, with hesitancy in both directions."
She added that technicals for both metals look poor, though some flow indicators have improved.
Silver slipped 0.2% to $64.94/oz; platinum and palladium edged lower.
What to watch next?
Whether the Strait of Hormuz situation materially improves — this determines the trajectory of energy prices and inflation expectations.
How the Fed's policy path evolves — the stronger the rate-hike expectations, the heavier the pressure on gold.
This reflects a market where gold is squeezed between "geopolitical risk" and "rate suppression." Whichever force hits an inflection point first will set bullion's next direction.
Content is for reference only, not financial advice.