Gold held above $4,500 an ounce on Monday as a stronger dollar and bets on tighter United States monetary policy offset safe haven demand, with investors awaiting key jobs data.
Spot gold drifted lower, easing from a two week high. It had pulled back from the area near $4,600 reached late last week. The metal has struggled to advance because the dollar, not gold, has drawn most of the safe haven flows during the war between the United States and Iran.
Traders also watched the diplomatic track, where Iranian government aligned media reported on Monday that Tehran was cutting off talks with Washington. Reports of a breakdown have tended to lift oil and strengthen the dollar, both of which press on bullion.
That pattern has upended gold’s usual role. Since the conflict began on 28 February, the metal has fallen roughly 12 percent, as surging energy costs fed inflation concerns and strengthened expectations of higher interest rates. Traders have largely priced out United States rate cuts this year, and some are now betting on a rate increase, which supports the dollar and caps the non yielding metal.
Even so, gold remains far above its level a year earlier, held up by record central bank buying that has driven much of this cycle’s rally.
Attention this week turns to the United States monthly jobs report, which should signal the strength of the labour market and the likely path of rates. A strong reading would reinforce the case for tighter policy and could weigh further on gold.
Diplomacy remains fragile. A two week ceasefire brokered by Pakistan took effect on 8 April, yet the Strait of Hormuz, a vital global oil route, has stayed largely closed. Iran’s parliament speaker and chief negotiator, Mohammad Bagher Ghalibaf, said Tehran would not accept a deal unless “the rights of the Iranian people are secured.”
For now, gold sits between two forces. Geopolitical risk and central bank demand support prices, while a firm dollar and the prospect of higher rates limit any rally.
