Gold steady as Middle East talks weigh on interest rate outlook
The US and Iran signal that negotiations to restore shipping through the Strait of Hormuz are ongoingPublished Tue, Aug 4, 2026 · 07:45 AM— Updated Tue, Aug 4, 2026 · 08:47 AM[MELBOURNE] Gold moved in a. . .
The US and Iran signal that negotiations to restore shipping through the Strait of Hormuz are ongoingPublished Tue, Aug 4, 2026 · 07:45 AM— Updated Tue, Aug 4, 2026 · 08:47 AM[MELBOURNE] Gold moved in a narrow range as traders monitoredtalks in the Middle Eastfor signs of progress that would ease pressure on the US Federal Reserve to raise interest rates. Bullion traded around US$4,050 an ounce, after ending the previous session 0. 2 per cent higher. The US and Iran both signalled that negotiations to restore shipping through the Strait of Hormuz were ongoing, raising hopes for a pickup in supply that would soften energy-driven inflation. Oil prices were also steady after sliding on Monday (Aug 3). US President Donald Trump said his latest offer of talks is Teheran’s “last chance” and that he expects a full reopening of the strait. Teheran denied it was talking with the US, but saiddiscussions with Omanto get more ships moving through the key waterway were making progress. The Fed’s Bank of New York president John Williams said on Monday that interest rates remain well positioned as inflation should ease during the second half of 2026. The central bankleft rates unchangedin the 3. 5 per cent to 3. 75 per cent range last week, despite three officials dissenting in favour of a quarter-point hike. Citi Research analysts said gold prices could stagnate or even decline over the next month before rallying to US$4,500 an ounce in the fourth quarter. SEE ALSO“Our base case is for the US/Iran conflict to end and Hormuz flows normalising and, with this, lower real interest rates and a weaker US dollar and stronger investor interest in gold returning,” the analysts including Kenny Hu said in a note. “This could happen as soon as September to December, but is highly dependent on the conflict ending. ”Gold isdown by more than a fifthsince the US-Iran warbegan more than five months ago, with high energy prices stoking inflationary pressures and raising the likelihood that interest rates will stay higher for longer – a headwind for precious metals, which do not pay interest. Spot gold was little changed at US$4,052. 81 an ounce as of 7. 20 am in Singapore. Silver dipped 0. 1 per cent to US$58. 11 an ounce. Platinum and palladium also edged lower. The Bloomberg Dollar Spot Index, a gauge of the US currency, was flat after ending the previous session marginally lower. BLOOMBERG