Gold rebounds from one-week low as Iran cites progress in peace talks with United States

Gold prices rebounded on Monday from a more than one-week low as oil prices eased after Iran cited progress in peace talks with the United States, though expectations of higher US interest rates limited the metal’s outlook.

Spot gold rose 0.8% to $4,194.99 per ounce by 0608 GMT, after falling on Friday to its lowest level since June 11.

US gold futures for August delivery declined 0.8% to $4,213.10.

The first round of talks between senior US and Iranian officials in Switzerland concluded on Monday, with Iran’s foreign ministry spokesperson saying progress had been made, according to Iran’s Press TV.

A joint statement from Qatar and Pakistan, which are mediating the talks, said the US and Iran had agreed on a roadmap towards a final deal within 60 days.

The development helped ease oil prices, with Brent crude futures falling more than 1% after the announcement.

Lower oil prices can reduce inflation concerns, which in turn may ease pressure for higher interest rates. Gold typically becomes less attractive when rates rise because it does not offer interest income.

However, the outlook for gold remained under pressure after hawkish signals from the US Federal Reserve last week.

Federal Reserve Chair Kevin Warsh’s focus on inflation in last week’s press conference led investors to expect a rate increase sooner than previously anticipated.

Nine of the Federal Reserve’s 19 policymakers now believe the policy rate will need to be raised this year.

According to the CME FedWatch Tool, traders see an 89% chance of a rate hike in December, up from 61% before the Federal Reserve’s meeting.

Among other precious metals, spot silver rose 2.4% to $66.48 per ounce, platinum gained 0.7% to $1,675.91, and palladium increased 1.8% to $1,280.45.