Gold Dips on Peace Talks, Fed Outlook

Bullion fell as much as 1% earlier, trading below $4,800 an ounce. US President Donald Trump stated Vice President JD Vance is prepared for negotiations in Islamabad, but Iran has not confirmed its delegation, with a two-week ceasefire expiring Wednesday evening and unlikely to be extended.

This geopolitical uncertainty, coupled with the ongoing energy-supply shock from the eight-week Middle East war, intensifies inflationary pressures, making central banks more inclined to maintain or raise interest rates, a significant headwind for non-yielding gold, which has lost about 10% since late February. Investors are also awaiting Kevin Warsh's Senate Banking Committee testimony for the Federal Reserve chair position, with any indication of monetary easing supporting gold, while a cautious stance on inflation would be negative.

Marc Loeffert of Heraeus Precious Metals GmbH notes that while volatility persists, gold retains its long-term fundamental attraction as a store of purchasing power.