Gold Holds Firm as Softer Dollar Offsets Iran Tensions Pause

U.S, May 19 : Gold prices traded in a narrow range on Tuesday as a weaker U.S. dollar and declining crude oil prices balanced investor sentiment after U.S. President Donald Trump paused a planned military attack against Iran. The move raised hopes for renewed diplomatic negotiations in the Middle East and reduced fears of prolonged inflationary pressure.

Spot gold remained largely unchanged at $4,565.40 per ounce by 0103 GMT after touching its lowest level since March 30 during the previous trading session. Meanwhile, U.S. gold futures for June delivery edged 0.2 percent higher to $4,567.90 per ounce.

The decline in the U.S. dollar provided support to bullion prices, making gold more affordable for investors holding other currencies. Analysts said the softer greenback helped offset pressure from easing geopolitical tensions and lower energy prices.

Investor focus shifted after President Trump announced that Washington had temporarily halted plans for a military strike on Iran to allow space for diplomatic talks aimed at ending the ongoing U.S.-Israeli conflict. Reports indicated that Iran had sent a fresh peace proposal to the United States, raising expectations of possible negotiations in the coming days.

The development also triggered a sharp decline in oil prices, with crude futures falling more than 2 percent during early Asian trading hours. Market participants viewed the drop as a sign of easing supply disruption concerns in the Middle East, a key global oil-producing region.

Lower crude oil prices are generally seen as reducing inflationary risks. Although gold is traditionally considered a hedge against inflation and geopolitical uncertainty, rising interest rates often weaken demand for the non-yielding precious metal. Traders therefore closely monitored the combined impact of oil, inflation expectations and central bank policy signals.

Markets are also awaiting changes at the U.S. Federal Reserve as financier Kevin Warsh is scheduled to be sworn in as the new Federal Reserve chief on Friday by President Trump. Investors are assessing how the central bank may respond to persistent inflation pressures and whether future interest-rate cuts desired by the White House could be delayed.

In another major development in the global bullion sector, Ghana announced plans to strengthen its gold reserves by increasing the amount of gold large-scale miners must sell to the country’s central bank. The new policy raises the requirement from 20 percent to 30 percent of annual output as part of a broader reserve-building strategy.

Among other precious metals, spot silver slipped 0.3 percent to $77.58 per ounce. Platinum eased 0.2 percent to $1,976.15, while palladium declined 0.6 percent to $1,409.75 per ounce.

Investors are now closely watching key economic indicators scheduled for release later in the day, including U.K. unemployment data and the European Union’s trade balance figures, which may provide further direction to currency and commodity markets.