US-Iran Deal Hopes Pressure Dollar and Oil

Renewed hopes for a lasting ceasefire agreement between the United States and Iran, bolstered by a statement from the US President about lifting a naval blockade, created significant market shifts. This improved risk sentiment exerted downward pressure on the US Dollar across the board and caused oil prices to hit one-month lows amid expectations of increased supply. However, Iran's top negotiator expressed a lack of trust in words, suggesting that any final agreement remains tentative.

Gold Approaches $4,600 on Shifting Headwinds

Gold prices extended their rebound, approaching the $4,600 per ounce level as geopolitical developments drove investor demand. The rally was primarily fueled by a softer US Dollar and declining oil prices, both resulting from optimism around a potential US-Iran peace deal. In contrast, silver prices saw a minor decline during the same period.

Fed Officials Highlight Stubborn Inflation

Several Federal Reserve officials expressed concerns that progress in lowering inflation has stalled and continues to be a drag on the US economy. Speakers noted that sticky inflation, alongside geopolitical risks and elevated energy prices, is diminishing the purchasing power of households. Fed Governor Bowman specifically linked the risks to inflation to the continuation of the war in the Middle East.

Global Central Banks Navigate Divergent Paths

Central banks around the world showed differing policy stances, influencing currency markets. The Bank of England's governor struck a hawkish tone, while the Reserve Bank of New Zealand signaled that large rate hikes remain an option. Conversely, Japan's Ministry of Finance confirmed it spent heavily on yen-buying intervention, while Germany's annual inflation cooled more than expected and Canada's GDP contracted in the first quarter.