Gold prices retreated from a one-month high on Wednesday, with spot gold falling 0.3% to $4,828.07 per ounce after being rejected at the $4,860 level as diplomatic overtures between the United States and Iran cooled safe-haven demand.
"Gold prices are reacting to the Middle East headlines in the short term with hopes that the two countries will engage in talks," said Marex analyst Edward Meir. He added that if talks break down, "we can revert to the pre-ceasefire pattern of lower gold, a stronger dollar and lower equity prices."
The pullback came as the U.S. dollar rebounded from a more-than-one-month low, making bullion more expensive for holders of other currencies. Despite the intraday dip, gold remains up 1.6% for the week. U.S. gold futures for June delivery were little changed at $4,851.30.
The market's focus now turns to the prospect of renewed negotiations, which could cap gold's rally. Traders are pricing in a 30% probability of a 25-basis-point Federal Reserve rate cut this year, a significant increase from 13% last week, according to the FEDWATCH tool.
Other precious metals were mixed. Spot silver rose 0.8% to $80.15 an ounce and platinum gained 1.1% to $2,126.14. Palladium bucked the trend, falling 0.1% to $1,585.60. The cooling of the relative strength index (RSI) on gold charts may signal a period of consolidation as traders weigh geopolitical developments against monetary policy expectations.
This article is for informational purposes only and does not constitute investment advice.
