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Gold prices (XAU/USD) remain stagnant near $4,455 during the early Asian session on Thursday as US-Iran peace negotiations face uncertainties. The precious metal's flat trajectory reflects a balance between geopolitical risks and expectations of the upcoming US PCE inflation data, which could influence the Federal Reserve's monetary policy decisions. Market participants are closely monitoring these developments to gauge potential shifts in gold's safe-haven demand.
For traders, the lack of directional movement in gold highlights the delicate interplay between geopolitical tensions and macroeconomic data. While rising US-Iran tensions typically boost gold as a hedge against instability, the anticipation of the PCE report—a key inflation indicator—introduces volatility. The Fed's response to inflation data could either strengthen the US dollar, capping gold's gains, or weaken it, pushing gold higher. This dual dynamic creates a cautious trading environment.
Looking ahead, the release of the US PCE data later this week will be critical. A higher-than-expected reading might prompt tighter Fed policies, weighing on gold, while a lower figure could ease rate hike concerns and support bullion prices. Traders should also monitor any breakthroughs or setbacks in US-Iran negotiations, as these could trigger sudden market reactions.
