Gold Advances as Ceasefire Talks Ease Risk Mood

Key Moments

Gold Firms as Dollar Eases on Ceasefire Hopes

Gold (XAU/USD) rises modestly on Monday as the US Dollar weakens. Improved sentiment follows renewed diplomatic efforts between the United States and Iran. At the time of writing, gold trades near $4,691 after rebounding from a low near $4,600.

Meanwhile, traders react to reports of active ceasefire talks. These developments reduce immediate geopolitical risks. As a result, risk appetite improves and demand for the US Dollar softens.

Ceasefire Talks and Hormuz Developments

According to Axios, the United States, Iran, and regional mediators are discussing a 45-day ceasefire. The goal is to create a path toward ending the conflict. Sources familiar with the talks confirmed the discussions.

In addition, Reuters reports a two-step proposal to end hostilities. The plan could begin as early as Monday. It also includes reopening the Strait of Hormuz.

At the same time, Iran’s Foreign Ministry stated it has prepared a response to the US. Officials will release details soon.

Earlier, US President Donald Trump warned of possible strikes on infrastructure if no agreement is reached. He also demanded the reopening of the Strait of Hormuz by Tuesday evening.

Oil Pullback and Rate Outlook Cap Gains

Although talks support sentiment, uncertainty remains. Still, oil prices have eased from recent highs. However, crude stays well above pre-war levels, keeping inflation concerns alive.

As a result, markets expect central banks, especially the Federal Reserve, to keep rates high. Some even see room for further hikes. This outlook limits gold’s upside because higher yields reduce its appeal.

Looking ahead, traders will focus on US data, Fed signals, and geopolitical updates for direction.

Key US Data in Focus

This week, investors will watch key inflation reports, including CPI and PCE data. These releases will offer clues about price trends and Fed policy.

Later on Monday, the ISM Services PMI will draw attention. Strong data could support the Dollar, while weaker data may help gold.

Technical Outlook: Gold Holds Key Support

From a technical view, gold shows early signs of stabilization. The price holds above the 100-day SMA near 4,654, which now acts as support.

If gold holds above the 100-day SMA, it may move toward 4,800. A break higher could then target the 50-day SMA near 4,944.

Meanwhile, the RSI has recovered from oversold levels and now sits just below 50. This suggests fading bearish pressure but not a strong uptrend yet.

At the same time, the MACD has turned higher and crossed above its signal line. This indicates improving momentum.

On the downside, a break below the 100-day SMA could expose the 4,350 level. Further losses may bring the 4,100 area into focus.

Gold Market FAQs

Why do people invest in Gold?

Gold has long served as a store of value and a medium of exchange. Today, investors see it as a safe-haven asset during uncertain times. It also acts as a hedge against inflation and currency weakness.

Who buys the most Gold?

Central banks hold the largest gold reserves. They buy gold to diversify assets and support their currencies. In recent years, emerging economies like China, India, and Turkey have increased purchases.

How is Gold correlated with other assets?

Gold often moves opposite to the US Dollar and US Treasuries. When the Dollar weakens, gold usually rises. It also tends to gain when stock markets fall.

What drives Gold prices?

Gold prices depend on several factors, including interest rates, inflation, and geopolitical risks. A weaker US Dollar often supports gold, while higher rates can limit gains.