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Gold held firm on Monday amid geopolitical uncertainty. Tensions remain elevated after President Donald Trump’s ultimatum.
However, signs of diplomatic efforts fuel hopes of a positive resolution of the current situation.
As a result, the metal could face some uncertainty on this front and could react to any material development.
In parallel, persistent geopolitical risks beyond the Middle East, particularly in Eastern Europe, continue to provide an underlying layer of support. Central bank demand also remains a stabilising factor, with sustained purchases from countries such as China and the Czech Republic.
However, stronger-than-expected US labour data has reinforced a cautious view of the interest rate narrative, supporting Treasury yields. Markets currently see little scope for rate cuts through year-end, which could cap bullion’s upside potential.
Looking ahead, gold’s direction will likely depend on incoming US data and Federal Reserve communication, including minutes and growth indicators, as well as developments in geopolitical negotiations and inflation concerns.
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