FX.co ★ Gold Pares Losses

Gold prices pared earlier losses to trade near $4,680 an ounce on Monday, supported by a softer US dollar and reports of a Pakistan-brokered ceasefire proposal. Markets weighed the prospect of a 45-day truce, which has offered some relief to bullion after the forced liquidations seen throughout March.

Nonetheless, upward pressure on yields persists amid evidence of a resilient US labor market. Friday’s jobs report showed a gain of 178,000 positions in March and an unemployment rate of 4.3%, reinforcing expectations that the Federal Reserve will keep interest rates at restrictive levels. This “higher for longer” policy outlook continues to weigh on non-yielding assets such as gold.

At the same time, geopolitical risk continues to underpin prices. President Donald Trump’s looming Tuesday deadline for potential strikes on Iranian infrastructure is helping to maintain a floor under the market. Tehran’s refusal to reopen the Strait of Hormuz as part of any temporary agreement is preserving significant supply-side inflation risks, further complicating the outlook for bullion.

Gold remains down roughly 12% since the conflict began.