Gold prices climb 1.2% as US-Iran peace talks stall

Gold prices rose 1.2% in early Asian trade to $2,198.40 an ounce, as reports of a stalled U.S.-Iran peace process renewed demand for the safe-haven asset. The potential for a deal, which could have lowered oil prices and eased inflationary pressures, now appears to be on hold.

"A confirmed peace deal would de-escalate geopolitical tensions, likely causing oil prices to fall," an analyst at Edgen said. "This could reduce global inflation, influencing central bank monetary policy and causing further volatility in safe-haven assets like gold and the USD."

The move in gold follows reports that the U.S. turned down a recent Iranian peace proposal. According to Axios, the White House warned that hostilities could resume, diminishing hopes for an imminent de-escalation of conflict in the Middle East. President Trump had earlier warned that the "clock is ticking" for Iran to accept a deal.

The market's reaction underscores the sensitivity of gold prices to geopolitical developments in the Middle East. A successful peace agreement would likely lead to a sell-off in gold as investors move back into riskier assets. Conversely, a breakdown in talks or renewed conflict could see gold prices push higher. COMEX gold futures for June delivery were up 1.1% at $2,205.50.

This article is for informational purposes only and does not constitute investment advice.