Gold drops more than 3% as US-Iran negotiations increase demand for the USD

Gold Prices Drop Sharply as US Dollar Strengthens

On Tuesday, gold (XAU/USD) experienced a steep decline of over 3%, driven by a resurgence in the US Dollar. This uptick in the Greenback follows encouraging developments in discussions between the United States and Iran, with a senior White House official—cited by Axios—indicating positive momentum in the negotiations.

At the latest update, gold was trading at $4,869, having earlier peaked at $5,000 for the day. Despite a mixed market sentiment, the overall firmness of the US Dollar and a stabilization in US Treasury yields have put downward pressure on gold prices.

The US Dollar Index (DXY), which tracks the dollar against a basket of six major currencies, has risen by 0.17% to reach 97.25. Meanwhile, yields on the US 10-year Treasury note are steady at 4.052%.