Gold Prices Stable Amidst US-Iran Peace Deal Wait, Fed Policy Uncertainty

New York. Gold prices, which reached their highest point in a week in the last session, appeared almost stable in the market on Tuesday. Investors are awaiting further details of the peace agreement to be signed between the United States and Iran, which has prevented major fluctuations in prices. On Monday alone, gold prices rose by as much as 3.6 percent, reaching their highest point since June 5. On the international market on Tuesday, the price of spot gold increased by 0.2 percent per ounce to $4,315.87.

US President Donald Trump announced that a preliminary agreement has been signed between the US and Iran to end the conflict in the Gulf region. However, detailed information about this is yet to be made public, and both countries have stated that further negotiations are required for lasting peace. According to Marex analyst Edward Meir, gold prices have seen a good increase since last Thursday following news related to Iran, and this positive trend is likely to continue until the formal signing ceremony on Friday.

Meanwhile, the US dollar index has contracted to its lowest point in 10 days ahead of the Bank of Japan's interest rate decision. Market investors are awaiting the US Federal Reserve's upcoming policy decision and the statement from new chairman Kevin Warsh. The market anticipates no change in interest rates this time. According to analyst Meir, although the market does not expect interest rates to decrease this year, if Chairman Warsh signals a possible rate cut in the latter half of this year, the dollar will weaken further, and gold prices will see another significant surge. However, conversely, if he signals a hawkish stance on interest rates, gold prices may face some pressure.

When interest rates are high, the appeal of gold decreases because gold does not generate regular income like interest. Following the peace agreement, the possibility of the US raising interest rates in the upcoming December has decreased. According to the CME FedWatch tool, the probability of an interest rate hike, which was estimated at 70 percent last week, has now dropped to 57 percent.

Meanwhile, financial institution Citi has raised its gold price forecast for the next zero to three months by $500 per ounce, projecting it to reach $4,500. Other precious metals have seen some decline. The price of spot silver has fallen by 1 percent to $69.29 per ounce, while platinum has decreased by 0.9 percent to $1,751.55, and palladium has dropped by 1.6 percent to $1,327.27.