Gold (XAU/USD) is trading with a mild upward bias on Thursday, remaining within a multi-week range as traders await clearer signals from ongoing US-Iran peace talks. At the time of writing, XAU/USD is trading around $4,816, after reaching an intraday high of $4,838. A modest recovery in the US Dollar is acting as a headwind for gold prices [1].
Markets are cautiously optimistic about the possibility of a deal to end the US-Iran war, with reports indicating that a two-week ceasefire extension is under consideration to allow more time for negotiations. White House Press Secretary Karoline Leavitt described conversations with Iran as 'productive,' but denied reports that the US had requested a ceasefire extension, noting that the current truce is set to expire next week. Pakistan’s Army Chief, Asim Munir, has arrived in Tehran to deliver a direct message from Washington to Iranian leadership, following remarks from US President Donald Trump that negotiations could resume this week after previous talks in Islamabad failed to yield a breakthrough. A senior Iranian official stated that the visit by Pakistan’s army chief has helped narrow differences in some areas, increasing hopes for a ceasefire extension and a second round of talks, though fundamental disagreements over nuclear issues persist [1].
Gold’s outlook remains closely tied to developments in US-Iran diplomacy and oil prices. The precious metal is currently trading about 10% below its peak since the war began, as oil-driven inflation risks have fueled expectations that central banks, especially the Federal Reserve, may need to raise interest rates. Although crude prices have eased from recent highs, reviving some Fed rate-cut bets, they remain elevated due to ongoing supply disruptions through the Strait of Hormuz amid a dual blockade by US forces and Iran. This situation keeps inflation concerns in focus and reinforces expectations that the Fed will likely keep interest rates unchanged in the near term [1].
St. Louis Fed President Alberto Musalem commented that supply shocks are placing the Fed’s inflation and employment targets at risk, and that the current rate range is likely appropriate for some time. He also noted that the oil shock is probably feeding into core inflation, which could remain near 3% through the end of the year [1].
CONCLUSION
Gold prices remain range-bound as markets monitor US-Iran ceasefire negotiations and persistent oil-driven inflation risks. The outlook for gold is closely linked to diplomatic developments and central bank policy, with the Federal Reserve expected to maintain current rates amid ongoing supply shocks and elevated inflation concerns.