FX.co ★ Gold Pares Sharp Losses

Gold pared earlier losses to trade above $4,480 per ounce on Monday, as global markets whipsawed in response to Donald Trump’s unexpected announcement of a five-day pause in planned strikes on Iranian energy infrastructure. The metal initially sank to its lowest level since January, with surging oil prices and increasingly hawkish central bank signals shifting the market narrative toward a potential stagflationary shock.

However, gold later recovered to trade higher as the prospect of de-escalation eased some of the pressure on non-yielding assets from sharply rising Treasury yields. Although Tehran denied that any productive talks were underway, the pause suggested that the US administration is seeking to contain the energy price surge that has undermined global risk appetite.

As a result, the safe-haven premium in gold remained underpinned by conflicting reports about conditions in the Strait of Hormuz and the possibility of joint control over the strategic waterway.