Gold Prices Fall as U.S.–Iran Talks Steer Investors Away

Gold prices dropped over 2% amid progress in U.S.–Iran talks, leading investors to turn from safe-haven assets. Strengthening of the U.S. dollar pressured further selling. While Iran and the U.S. advanced nuclear talks, analysts see this as negative for gold. The Federal Reserve's upcoming decisions are also being closely watched.

Gold prices tumbled by more than 2% on Tuesday as progress in U.S.–Iran negotiations diverted investors from safe-haven assets. Concurrently, a stronger dollar compounded pressures to sell, with spot gold hitting $4,896.09 per ounce by 09:26 a.m. ET.

The U.S. dollar index ascended by 0.5% against a group of currencies, thereby increasing the cost of dollar-priced bullion for foreign buyers. Jim Wyckoff, a senior analyst at Kitco Metals, noted the absence of fresh bullish fundamentals contributing to higher gold prices, as it needs constant positive updates to sustain growth.

Iran and the United States made headway on key 'guiding principles' in nuclear discussions, potentially impacting market anxiety levels detrimentally for gold and silver, as conflicts between nations generally boost market fears allowing the two metals to act as hedges. Investors are now focusing on the Federal Reserve's forthcoming meeting minutes and economic reports for hints on interest rate policies.

(With inputs from agencies.)