Gold prices steady as softer dollar offsets Iran peace developments

Dubai: Gold prices steadied in early Asian trading on Monday, recovering from earlier losses as a weaker U.S. dollar offered support, while markets closely monitored geopolitical signals linked to the United States and Iran.

Spot gold was largely unchanged at around $4,707 per ounce, after falling nearly 1% earlier in the session. The precious metal ended last week down about 2.5%, breaking a four‑week rally. U.S. gold futures for June delivery slipped modestly to $4,720.

The marginal pullback in the dollar helped limit downside pressure on bullion. Sentiment was shaped by reports suggesting that Iran, via Pakistani intermediaries, presented a proposal to the United States aimed at reopening the Strait of Hormuz and bringing an end to the ongoing conflict.

Market participants see geopolitical progress — or the lack of it — as a critical short‑term driver for gold, traditionally viewed as a safe‑haven asset during periods of uncertainty.

S. President Donald Trump said Iran could initiate direct contact if it wished to negotiate an end to the two‑month conflict, while reiterating that Tehran must not obtain nuclear weapons. However, optimism was tempered after Washington cancelled a planned visit by U.S. envoys to Pakistan, a key intermediary in the peace process.

The mixed diplomatic messages have kept investors cautious, preventing strong directional moves in gold prices.

Meanwhile, oil prices moved higher, reflecting concerns that prolonged tensions could continue to disrupt Middle Eastern energy exports. Rising crude prices tend to feed into inflation by increasing transportation and production costs.

While gold is often used as an inflation hedge, sustained inflation can also keep interest rates higher for longer, reducing the appeal of non‑yielding assets like bullion.

Attention now turns to the U.S. Federal Reserve’s interest rate decision on Wednesday, which could prove decisive for gold’s near‑term direction.

Analysts note that any indication the Fed plans to maintain restrictive policy due to energy‑driven inflation could weigh on gold, while a more cautious or balanced outlook may offer support.

Silver edged lower to about $75.44 per ounce

Platinum rose slightly to near $2,013

Palladium fell to around $1,487