Gold prices exhibited volatility as traders assessed the potential for a diplomatic breakthrough in the month-long conflict between the US and Iran, amid ongoing efforts to broker a ceasefire. Trading activity was subdued following the Easter holiday, with several European and Asian markets closed, leading to minor swings in gold prices.
Reports indicate that US allies are pushing for a last-minute agreement with Iran, after US President Donald Trump extended the deadline for Iran to reopen the Strait of Hormuz to Tuesday. According to media outlet Axios, Pakistan, Egypt, and Turkey are actively mediating to secure a ceasefire agreement lasting approximately 45 days.
Since the conflict began in late February, gold prices have fallen by more than 10%. Soaring energy prices have heightened inflation concerns and reduced expectations for interest rate cuts—which typically benefit non-yielding precious metals like gold. Additionally, investors selling holdings to cover losses elsewhere have diminished gold's appeal as a safe-haven asset.
"Investors are taking profits to protect their assets," said Robert Gottlieb, a former precious metals trader at JPMorgan and current market commentator.
Key US inflation data to be released this week will fully reflect the surge in gasoline prices. Economists predict the Consumer Price Index (CPI) for March will rise by 1%, the largest monthly increase since 2022. The conflict has already driven US retail gasoline prices up by more than $1 per gallon.
As of 10:52 AM New York time, spot gold edged down 0.1% to $4,683.70 per ounce; silver declined 0.2%; while platinum and palladium both traded lower. The Bloomberg Dollar Spot Index fell 0.2%.
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