Gold prices slide as dollar strengthens amid US-Iran talks

Gold prices fell sharply on Tuesday as global markets reacted to signs of progress in diplomatic talks between the United States and Iran and a stronger US dollar. The combination of easing geopolitical risks and currency strength reduced demand for gold as a safe‑haven investment, pushing bullion down to multi‑day lows.

Spot gold dropped more than 2 per cent, slipping below key psychological levels, while gold futures for April delivery also posted notable declines. At the same time, silver and other precious metals extended losses, reflecting broader selling pressure across commodity markets.

Analysts say the market reaction shows that investors are shifting away from safe assets as tensions appear to be easing. Officials from the United States and Iran held discussions aimed at resolving their long‑standing nuclear dispute, and news that both sides had reached an understanding on key “guiding principles” helped calm fears of conflict. However, this does not guarantee a final agreement.

At the same time, the US dollar index strengthened against major currencies, making gold more expensive for buyers using other currencies. A firmer dollar often dampens appetite for gold, which does not pay interest and competes with yield‑bearing assets when currency conditions change.

Market participants are also focusing on upcoming US economic data. Traders are awaiting minutes from the Federal Reserve’s latest meeting and key inflation readings that could shape expectations for future interest rate cuts. Forecasts suggest the first rate cut of the year may come in mid‑year, a development that could support gold if confirmed.

Trading conditions were lighter than usual in Asia due to Lunar New Year holidays, which may have heightened price swings as liquidity thinned across major markets.

Overall, Thursday’s price action highlights how gold remains sensitive not just to economic indicators and interest rate expectations, but also to shifts in geopolitical sentiment. A confirmed diplomatic breakthrough could further ease safe‑haven demand, while renewed tensions or surprises in economic data could quickly reverse the recent slide