Gold Prices Steady Amid US-Iran Diplomacy and Fed Outlook

Gold prices have remained stable as investors watch diplomatic efforts to ease tensions between the US and Iran, potentially leading to lower energy prices and reduced pressure on the Federal Reserve to raise interest rates.

The standoff has pushed gold down by over a fifth since late February, with high energy prices stoking inflationary pressures and increasing the likelihood of higher interest rates. However, Fed officials kept policy unchanged last week despite three dissents in favor of a hike.

According to Goldman Sachs Group Inc., accelerating central-bank gold demand, led by China, should help gold prices rebound despite temporary downside pressure from energy and rates markets. Citi Research analysts predict gold could stagnate or decline over the next month before rallying to $4,500 an ounce in the fourth quarter.