Gold prices edged higher during Monday's Asian deals, but remained largely rangebound as investors adopted a cautious stance ahead of a key week for global central banks, including the upcoming Federal Reserve policy decision.
By 3:35 pm AEST (5:35 am GMT), spot gold was last up 0.1% at $4,711.44 per ounce, hovering close to the $4,700 level as modest gains in risk appetite tempered demand for safe-haven assets.
The precious metal found some support as the U.S. dollar softened, with sentiment improving on signs that tensions between the United States and Iran could ease, with Axios citing sources that Iran had proposed a deal to reopen the strategically critical Strait of Hormuz while postponing nuclear negotiations.
The prospect of reduced geopolitical risk weighed on the U.S. dollar, providing a tailwind for bullion.
However, ongoing uncertainty surrounding Iran’s nuclear programme and the broader conflict continues to limit stronger directional moves.
At the same time, elevated oil prices have kept inflation concerns in focus, complicating the outlook for monetary policy and gold demand.
Market participants are now turning their attention to the Federal Reserve, which is set to announce its latest policy decision later this week.
The meeting is expected to be a key driver for gold, particularly through its impact on interest rate expectations and the U.S. dollar.
With a busy week of central bank meetings ahead, investors are likely to remain sidelined, limiting fresh positioning in bullion.
