Gold edges higher above $4,550 on US-Iran peace optimism

• Gold price drifts higher to around $4,575 in Tuesday’s early Asian session. 

• Optimism for a breakthrough in the US-Iran peace deal lifts the Gold price. 

• Traders await the US April PCE Price Index inflation report on Thursday for fresh impetus. 

Gold price (XAU/USD) gains ground to near $4,575 during the early Asian session on Tuesday. The precious metal edges higher as hopes for US-Iran peace negotiations weakened the US Dollar (USD). 

US President Donald Trump said on Monday that negotiations with Iran over an interim deal to extend their ceasefire and reopen the Strait of Hormuz were “proceeding nicely.” Trump had urged Saudi Arabia, Qatar, Pakistan, Turkey, Egypt and Jordan to join the Abraham Accords and establish diplomatic relations with Israel amid his administration’s ongoing negotiations with Iran.

However, the US and Israel still need to finalize critical details, including whether ships transiting the Hormuz Strait will be allowed free passage and how quickly billions of dollars of Iranian funds will be unfrozen.

“Trump has been raising market hopes for some sort of deal with Iran, which could lead to the reopening of the Strait of Hormuz. That prospect has weighed on oil prices and, by extension, given gold a welcome lift from an inflation perspective,” said Tim Waterer, chief ‌market analyst at KCM Trade.

The US April Personal Consumption Expenditures (PCE) Price Index report will take center stage later on Thursday. Any signs of hotter inflation in the US could reinforce a potential rate hike from the US Federal Reserve (Fed) and undermine the USD-denominated commodity price.