Gold prices moved in a tight range on Monday as the dollar dithered amid some hopes for a U.S.-Iran de-escalation, and as markets awaited a Federal Reserve meeting later this week.
Bullion saw some bids after logging a sharp drop last week, as a report over the weekend showed Iran offering a new proposal to the U.S. that involves the reopening of the Strait of Hormuz.
Spot gold was flat at $4,711.0 an ounce, while gold futures fell 0.3% to $4,725.94/oz by 02:01 ET (06:01 GMT).
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Other precious metals also moved little on Monday, with spot silver flat at $75.6975/oz, while spot platinum rose 0.5% to $2,023.54/oz.
US-Iran talks dither, Tehran offers proposal to reopen Hormuz- report Plans for more U.S.-Iran talks fell through over the weekend after Iranian officials left Pakistan, while Washington canceled plans to send a delegation to Islamabad.
Trump said Tehran could phone if it wanted to talk, and reiterated his stance that Iran could not have a nuclear weapon– which has been cited as a major motivator of the war.
But an Axios report spurred some hopes for de-escalation, stating that Iran gave the U.S. a new proposal on reopening the Strait of Hormuz and ending the war.
A key point of the proposal was to postpone discussions on Iran’s nuclear activities to a later date– a point that may face resistance from Washington.
U.S.-Iran tensions remained largely in play on Monday, with a naval blockade against Iran remaining in place, while Tehran continued to keep the Strait of Hormuz largely closed.
Hormuz’s closure sent oil prices up sharply, sparking concerns over sticky global inflation and more hawkish central banks. The dollar firmed on this notion, while non-yielding assets such as gold struggled.
Fed meeting awaited for more cues Focus this week is squarely on a Federal Reserve meeting, where the central bank is widely expected to leave interest rates unchanged. Focus will be on the Fed’s economic outlook in the face of heightened uncertainty over the Iran war.
This week’s meeting is expected to be the last under Fed Chair Jerome Powell, whose term ends on May 15.
Kevin Warsh, Trump’s nominee to replace Powell, testified before Congress last week that he had made no commitments to cut interest rates. Warsh was also viewed as a less dovish pick than markets were expecting.
His confirmation as the Fed chair is now expected to proceed after Republican Senator Thom Tillis dropped his opposition. This was after the Department of Justice dropped its criminal probe into Powell– a probe that was widely criticized for attempting to coerce the central bank into cutting rates.
