Gold (XAU/USD) rebounded sharply on Tuesday, rallying nearly 3% to trade at $4,648 after touching daily lows of $4,482, as easing war fears between the US and Iran lifted demand for the precious metal [1]. Iranian President Masoud Pezeshkian signaled readiness to end the conflict, stating that 'Iran seeks no war but is prepared to end' with security guarantees, while US President Donald Trump reportedly expressed willingness to end the campaign against Iran even if the Strait of Hormuz remains largely closed [1]. US Secretary of Defense Pete Hegseth described ongoing peace talks as 'very real' and gaining strength, further boosting market optimism [1].
The rally in gold was also supported by a decline in US Treasury yields, with the 10-year note falling four basis points to 4.31%, which weakened the US Dollar Index (DXY) by 0.58% to 99.91 [1]. Despite the current rebound, gold is set to post monthly losses exceeding 10% due to a broader sell-off triggered by rising energy prices [1].
US economic data showed a weakening labor market, as the Job Openings and Labor Turnover Survey (JOLTS) reported job openings in February at 6.882 million, down from 7.24 million and below estimates of 6.92 million [1]. However, the US Conference Board Consumer Confidence Index unexpectedly improved in March to 91.8, up from February's revised 91.0, though households anticipate higher prices in the coming year due to elevated energy costs [1].
Kansas City Fed President Jeffrey Schmid issued a hawkish warning, cautioning against assuming the jump in energy prices is transitory and emphasizing the need for policy actions to validate inflation expectations [1]. As a result, expectations for Federal Reserve rate cuts in 2026 have evaporated, with no easing projected amid persistent high energy prices [1]. Technically, gold broke above the 100-day Simple Moving Average (SMA) at $4,617, and a daily close above this level could pave the way for further upside, with bulls eyeing $4,700 as momentum builds [1].
CONCLUSION
Gold's sharp rebound reflects investor optimism over potential de-escalation in US-Iran tensions and falling US yields, though the metal remains on track for significant monthly losses due to broader market pressures. Hawkish Fed commentary and persistent high energy prices have shifted rate cut expectations, adding uncertainty to the outlook. Technical signals suggest further upside is possible if momentum continues.