(RTTNews) – Extending the losses from Thursday’s plunge, gold prices have turned lower on Monday amid persisting concerns of a high-interest-rate regime in the near-term in addition to a strengthening U.S. dollar despite U.S.-Iran peace talks showing signs of progress.
Of note, U.S. markets remained closed on Friday on account of the Juneteenth Federal Holiday.
Front Month Comex Gold for August month delivery has inched lower by $36.80 (or 0.87%) to $4,209.10 per troy ounce.
Front Month Comex Silver for August month delivery has tumbled by $0.897 (or 1.35%) to $65.680 per troy ounce.
Last week in the U.S., at the conclusion of the Federal Open Market Committee’s meeting on monetary policy, the U.S. Federal Reserve announced holding interest rates at the current 3.50% to 3.75% range due to persisting inflationary concerns.
The Fed’s Dot Plot indicated that a majority of the central bank’s policymakers anticipated the need to raise rates this year.
Since a high-interest regime for the U.S. dollar makes bullion-buying costlier for overseas buyers, gold prices continue to feel the heat.
Last Wednesday, U.S. President Donald Trump and Iran’s President Masoud Pezeshkian signed a 14-point Memorandum of Understanding to extend the earlier-agreed ceasefire for another 60 days.
Both nations agreed to discuss contentious issues that triggered the war and find a permanent solution to end the conflict.
The MoU rendered immediate reopening of the Strait of Hormuz and thereby ensured free transit of vessels from the Arab nations to rest of the world, a message which was welcomed globally by market participants.
On Sunday, the first round of meetings between the U.S. and Iranian negotiators began at Switzerland which extended until today.
Iran’s Foreign Minister Abbas Araghchi stated that major progress has been made to halt the Israel-Lebanon war, which he termed as the “first real test”.
Overshadowing the negotiations came Iran’s announcement that it closed the Strait of Hormuz again due to the Israeli attacks on Lebanon.
On Sunday, referencing the Iran-backed Hezbollah militia group in Lebanon, Trump posted on his Truth Social platform that Iran must stop their proxies in Lebanon from causing trouble failing which the U.S. will hit Iran harder again.
In an interview with Fox News, Trump threatened that if Iran closes the strait, there would be no Iran. Adding that the negotiators shall not make it back to Iran again, Trump asserted that the U.S. may take over the strait and start collecting tolls.
In protest, Iranian representatives walked out from the discussions though the high-level negotiators carried on with the talks.
The U.S. was headed by U.S. Vice President JD Vance, U.S. Special Envoy Steve Witkoff and Trump’s son-in-law Jared Kushner.
The Iranian side was headed by Iranian Parliament’s Speaker Mohammad Bagher Ghalibaf and Iran’s Foreign Miniser Abbas Araghchi.
Both the high-level teams had negotiations for around 80 minutes, according to Iranian media.
In contrast to Trump’s outburst, Vance downplayed the issues. He stated that Trump wants the U.S. to turn over a new leaf with Iran.
Qatar and Pakistan, which are the mediators, jointly stated that the U.S. and Iran agreed to install a communication line to avoid any further incidents in the Strait of Hormuz.
Both the nations have agreed on the setting up of a “de-confliction cell” with Lebanon’s government to guarantee the termination of military operations.
Further, a high-level committee would be established by the U.S. and Iran to provide political oversight in the mediation.
Technical-level talks are slated to carry on through the rest of this week.
Araghchi announced that Iran has secured waivers for oil and petrochemical exports among the few concessions.
WTI crude oil for July month delivery was last seen trading at $74.73, down by $1.87 (or 2.44%).
In spite of the decline in crude oil prices, consolidation in the U.S. dollar weighed on gold prices.
The U.S. dollar index was last seen trading at 100.98, up by 0.14 points (or 0.14%) today.
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