Home›Forex›Major Pairs›Gold holds near $4,000 as Fed hawkishness caps upside…

Gold holds near $4,000 as Fed hawkishness caps upside amid Iran tensions

XAU/USD was around $4,060, up 1.3% on the day, while the US dollar index hovered near 101.0 as investors favored safe havens.

Reported · Written up by our desk · Major Pairs

Gold edged higher on Tuesday, supported by buying interest around the $4,000 psychological level, with XAU/USD trading near $4,060, up 1.3% on the day, as traders weighed developments in the Middle East.

FXStreet cited the US military’s tenth consecutive night of strikes against Iran, with Iran’s Revolutionary Guards targeting US military assets across the region, and reported that diplomatic efforts were ongoing. The Associated Press said Iranian officials began meeting with mediators in Pakistan, while Reuters reported mediators offered Tehran a 10-day ceasefire to help restart an interim agreement.

The outlet said the US dollar remained the preferred safe-haven asset, with the US Dollar Index hovering around 101.0. However, gold’s upside was seen as limited because higher energy prices can stoke inflation concerns and reinforce expectations the Federal Reserve will keep policy tighter for longer, raising borrowing costs and reducing gold’s appeal versus interest-bearing assets.

Analysts quoted by FXStreet noted that gold is trying to build a base above $4,000 but that a more sustained recovery likely requires oil to cool, some easing in real yields, and lower Fed tightening expectations, otherwise near-term price action may remain two-way. FXStreet also noted XAU/USD was testing the 20-day simple moving average near $4,061.

Latest closeGold $3,981.40 ▼1.6%|Dollar index 100.71 ▲0.2%

More like this

Sources