Gold moves in a positive zone as dollar falls

Gold prices rose in European markets on Thursday, resuming the gains that paused yesterday and approaching a four-week high once again, moving into positive territory thanks to the decline of the American currency in the foreign exchange market.

This comes amid anticipation of new developments regarding the talks between the United States and Iran, as intensive diplomatic efforts continue to push for a new round of peace negotiations following the stumbling of the previous round hosted by Pakistan.

Price Overview

- Gold Prices Today: Gold metal prices rose by 1.0% to ($4,838.42), from the opening level of ($4,791.26), and recorded a low of ($4,791.10).

- Upon price settlement on Wednesday, gold prices lost about 1.05% due to correction and profit-taking operations, after having earlier recorded a four-week high of $4,871.34 per ounce.

The U.S. Dollar

The dollar index fell on Thursday by more than 0.2%, deepening its losses for the ninth consecutive session and recording a six-week low of 97.83 points, reflecting the continued drop in the levels of the American currency against a basket of global currencies.

Optimism has increased in the markets regarding the probability of the United States and Iran reaching a peace agreement, prompting investors to reduce their holdings of the American currency as a safe haven and move toward higher-risk assets.

U.S. President Donald Trump stated that the U.S.-Israeli war on Iran is "about to end," while the White House expressed optimism about the possibility of reaching a deal, noting the likelihood of additional rounds of direct talks in Pakistan.

Khoon Goh, head of Asia research at ANZ Bank, said: Markets are now essentially ignoring the conflict and expecting some kind of settlement. Goh added: With markets pricing out the impact of the war, we may see more pressure on the dollar and a resumption of the downward trend that began roughly last year.

U.S. Interest Rates

- According to the FedWatch tool of the CME Group: the pricing of the probabilities of keeping U.S. interest rates unchanged at the April meeting is currently stable at 99%, and the pricing of the probabilities of raising interest rates by about 25 basis points is at 1%.

- In order to re-price those probabilities, investors are closely following the release of more economic data from the United States.

Gold Performance Expectations

Kelvin Wong, senior market analyst for Asia Pacific at OANDA, said: The main driver (for the rise in gold prices) is optimism regarding a ceasefire between the United States and Iran.

Wong added: If we start to see a breakout above $4,900, a further potential rise toward the next intermediate resistance zone, which lies at the psychological level of $5,000, cannot be ruled out.

SPDR Fund

Gold holdings at the SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, increased on Wednesday by about 2.28 metric tons, marking the second consecutive daily increase and bringing the total to 1,051.76 metric tons, which is the highest level in a week.