Gold Soars Toward $3,400 as Trump Rejects Peace Talks Amid Israel-Iran Escalation

Gold Soars Toward $3,400 as Trump Rejects Peace Talks Amid Israel-Iran Escalation

Gold (XAU/USD) continued its sharp ascent on Tuesday, climbing to $3,395 as safe-haven flows dominate market sentiment amid deepening geopolitical risks and investor caution ahead of Wednesday’s Federal Reserve interest rate decision.

Trump Dismisses Iran Peace Negotiations

Tensions spiked after US President Donald Trump unequivocally denied involvement in any peace talks with Iran via his Truth Social account. Trump posted:

“I have not talked with Iran for 'Peace Talks' in any way, shape, or form. This is just more HIGHLY FABRICATED, FAKE NEWS! If they want to talk, they know how to reach out.”

He further stated that Iran “should have taken the deal that was offered,” implying that missed diplomatic opportunities may now lead to broader military conflict.

War Rhetoric and Military Escalation Fuel Gold Rally

Markets were already reacting to Trump's prior message urging Iranian citizens to evacuate Tehran, signaling the potential for a major escalation. Simultaneously, Israeli Prime Minister Netanyahu reinforced this stance amid continued air strikes on Iranian military and nuclear targets.

In response, Iran’s Revolutionary Guards launched additional missile and drone raids on Israeli positions. The escalating tit-for-tat military action has spurred strong demand for gold as a safe-haven asset.

Gold Eyes $3,400 with Key US Data Ahead

While the XAU/USD pair nears the significant $3,400 mark, market participants are also bracing for US Retail Sales data later today and the FOMC interest rate decision on Wednesday.

A disappointing retail print could reinforce dovish expectations, supporting further upside in gold, especially as geopolitical uncertainty remains high.

Conclusion

With war rhetoric intensifying and no signs of diplomatic resolution, gold prices remain buoyant. Traders are closely watching Middle East developments and the Fed’s rate stance for clues on whether XAU/USD can sustain its bullish momentum and break above the $3,400 psychological barrier.

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