Gold price (XAU/USD) trades on a flat note around $4,455 during the early Asian session on Thursday. The precious metal steadies as US-Iran peace negotiations face uncertainties. Traders prefer to wait on the sidelines ahead of the US Core Personal Consumption Expenditures (PCE) Price Index report, which is due later on Thursday.
US President Donald Trump said on Wednesday that he won’t be rushed into a deal, warning that Iran’s efforts to outlast him won’t work because he doesn’t “care about the midterms.” Trump further stated that the Strait of Hormuz will be “open to everybody” and that the US will “watch over it,” adding that those terms are a part of negotiations with Iran.
On Wednesday, US Secretary of State Marco Rubio said the US will give talks with Iran “every chance to succeed.” Rubio added that talks with Iran have made some progress. Trump prefers diplomacy but has other options available if that doesn’t work. Uncertainty over the US-Iran peace deal and the vital Strait of Hormuz could weigh on the Gold price in the near term.
All eyes will be on the release of the US PCE inflation data later in the day. This report might offer some clues about the US interest rate path this year. The headline PCE Price Index is expected to show a rise of 3.8% YoY in April, compared to 3.5% in March. Meanwhile, the core PCE Price Index is projected to show an increase of 3.3% YoY in April, versus 3.2% prior.
Any signs of hotter inflation in the US could reinforce the expectation of the interest rate hike from the US Federal Reserve (Fed) this year. It’s worth noting that Gold is often used amid geopolitical uncertainty but does not yield interest, making it less attractive when interest rates are high.
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