Gold Up 0.8% Amid Dollar, US‑Iran Talks
Spot gold increased 0.8% to settle at $4,191.43 per ounce, while front‑month gold futures slipped 0.9% to $4,209.70 per ounce. Silver rose 0.3% to $65.1065 per ounce and platinum gained 0.6% to $1,677.65 per ounce. On the broader metals market, Benchmark Copper Futures on the London Metal Exchange fell 0.7% to $13,595 per ton, whereas U.S. Copper Futures rose 0.5% to $6.3678 per pound.
The mixed price action occurred against a backdrop of a stronger U.S. dollar and a more hawkish Federal Reserve outlook. The Fed’s latest Summary of Economic Projections (SEP) showed at least half of the Federal Open Market Committee members now expecting interest‑rate hikes this year, shifting the dot‑plot to anticipate at least one 25‑basis‑point increase in 2026 compared with a prior expectation of two quarter‑point cuts. Bank of America indicated it no longer expects any Fed rate cuts until 2028. New Fed Chair Kevin Warsh announced the formation of five task forces to examine core monetary‑policy operations. Market participants, including senior analyst David Morrison of Trade Nation, noted that markets have priced in a high probability of a 25‑bp hike later this year, keeping gold under pressure and suggesting a potential support test around $4,000 per ounce.
Geopolitical developments also influenced sentiment. The United States highlighted progress in peace talks with Iran, noting that the critical Strait of Hormuz was open. President Donald Trump had previously signed a memorandum of understanding with Iran at the G7 summit in France, initiating an immediate cease‑fire, a 60‑day negotiation window, and the reopening of the Strait without charges. Iran pledged not to pursue nuclear weapons and to dispose of enriched material under a mutually agreed mechanism. However, renewed fighting between Israel and Iran‑backed Hezbollah in Lebanon over the weekend prompted Tehran to close the strait again, and Trump warned Iran to halt proxy activities in Lebanon.
Subsequent de‑escalation occurred when U.S. and Iranian representatives met in Switzerland at Lake Lucerne, mediated by Qatar and Pakistan. U.S. Vice President JD Vance reported that four key accomplishments were secured, the foremost being a mechanism to keep the Strait of Hormuz open.
The article was contributed by Ayushman Ojha and Jaiveer Shekhawat.