Gold prices (XAU/USD) came under selling pressure near $4,060 during Monday’s Asian session. The decline reflects uncertainty surrounding US-Iran negotiations and growing expectations for a hawkish Federal Reserve stance. Market focus now shifts to Thursday’s US Nonfarm Payrolls report for further direction on interest rates.
The United States and Iran have agreed to cease hostilities and will meet in Doha, Qatar, on Tuesday to address disputes over the Strait of Hormuz, according to Axios. US officials indicated both sides “will stand down for now” following recent exchanges of fire near the strategic waterway.
However, tensions remain elevated. Iranian Foreign Minister Abbas Araghchi asserted that responsibility for the Strait of Hormuz rests solely with Tehran, while an Iranian official warned that attempts to circumvent its preferred routing would trigger “tension and escalation.” Any resurgence of Middle East instability could reignite inflation concerns, prompting traders to increase rate-hike bets and pressuring non-yielding bullion.
According to the CME FedWatch Tool, markets are pricing in a roughly 59.7% probability of a rate hike as early as September 2026. Thursday’s employment data will provide critical clues on the US rate trajectory. Economists anticipate a gain of 114,000 jobs in June with the unemployment rate holding steady at 4.3%.
