Gold slips as markets await clarity on US-Iran talks
LONDON (April 21) Gold (XAU/USD) trades with a mild negative bias on Tuesday but lacks strong directional momentum, as investors hold back from aggressive positioning amid uncertainty over whether US-Iran peace talks will resume, following renewed tensions in the Strait of Hormuz over the weekend.
At the time of writing, XAU/USD is trading around $4,794, down nearly 0.53% on the day, pressured by a modest uptick in the US Dollar (USD).
US-Iran talks in doubt as ceasefire deadline approaches
Diplomatic efforts to end the US-Iran war remain uncertain, with mixed signals surrounding a potential second round of peace talks expected in Pakistan. US Vice President JD Vance is expected to lead a delegation to Islamabad for negotiations.
Multiple media reports suggested that Iran is sending a delegation for the talks. However, Iran’s state broadcaster pushed back on these claims, stating in a Telegram post that “so far, no delegation from Iran has travelled to Islamabad, neither a primary nor a secondary, neither initial nor follow-up.”
With the current two-week ceasefire set to expire on Wednesday, markets remain cautious. US President Donald Trump said on Monday it is “highly unlikely” that he will extend the truce, adding, “We will not open the Strait of Hormuz until a deal is signed.” Trump has also warned that fighting could resume if no agreement is reached.
On the Iranian side, Mohammad Bagher Ghalibaf said Tehran has been “preparing to show new cards on the battlefield” and would “not accept negotiations under the shadow of threats.”
Higher Oil prices keep pressure on Gold
Meanwhile, ongoing disruptions in the Strait of Hormuz, which remains under a dual blockade by US naval forces and Iran, continue to support elevated Oil prices. This is keeping inflation risks in focus and reinforcing expectations that major central banks, including the Federal Reserve (Fed), may keep interest rates higher for longer.
While Gold is often seen as a hedge against inflation, higher borrowing costs tend to weigh on its appeal by increasing the opportunity cost of holding the non-yielding metal. As a result, the precious metal remains under pressure in the near term, even as geopolitical risks provide some support and keep prices largely range-bound.
Looking ahead, traders will closely monitor developments around US-Iran talks and the ceasefire deadline, as well as movements in the US Dollar and Oil prices for fresh directional cues.
Focus will also be on the upcoming US Retail Sales data and confirmation hearing of Kevin Warsh, Donald Trump’s nominee for Federal Reserve Chair, scheduled for 14:00 GMT before the Senate Banking Committee.
FXStreet
