Gold Prices Hold Steady Ahead of Fed Decision
Gold prices traded in a narrow range on Monday as investors adopted a cautious stance ahead of a key policy decision from the Federal Reserve later this week. At the same time, markets continued to monitor rising oil prices driven by supply disruptions in the Middle East.
Spot gold remained largely unchanged at $4,707.26 per ounce, while gold futures slipped 0.4% to $4,723.31/oz as of 08:16 ET (12:16 GMT).
Focus Shifts to Federal Reserve Outlook
Investor attention is firmly on the Fed’s upcoming interest rate decision following its two-day meeting. The central bank is widely expected to keep rates unchanged, but markets are closely watching for signals on the economic outlook, particularly in light of the energy shock linked to the Iran conflict.
This meeting is also expected to be the last led by Fed Chair Jerome Powell, whose term ends in mid-May. Meanwhile, Kevin Warsh—nominated by Donald Trump—recently told Congress that he has made no promises regarding interest rate cuts if confirmed.
Gold, which does not yield interest, typically performs better in a low-rate environment, making the Fed’s guidance a critical driver for price direction.
U.S.–Iran Talks Collapse, Tensions Persist
Geopolitical concerns remain elevated after planned talks between the U.S. and Iran failed to materialize over the weekend. Iranian officials departed from Pakistan, while Washington canceled its delegation to Islamabad.
President Trump reiterated that Iran could initiate discussions but maintained a firm stance against Tehran developing nuclear weapons, a key issue behind the ongoing conflict.
Mixed Signals on Potential De-Escalation
Despite the breakdown in talks, reports suggested a possible diplomatic opening. Iran is said to have proposed reopening the Strait of Hormuz and ending hostilities, although nuclear negotiations would be delayed under the plan.
However, tensions remain high, with a naval blockade still in place and the Strait of Hormuz largely closed, continuing to disrupt global oil flows.
Oil Surge Fuels Inflation Concerns
The prolonged disruption in one of the world’s most critical oil routes has pushed crude prices significantly above pre-conflict levels. This has raised fears of rising global inflation, which could prompt central banks to adopt a more hawkish stance.
Stronger Dollar Limits Gold’s Upside
In this environment, investors have increasingly turned to the U.S. dollar as a relative safe haven. This shift has weighed on gold demand, particularly for international buyers, as a stronger dollar makes the metal more expensive globally. However, the dollar showed slight weakness on Monday, offering limited support to gold prices.
