Gold Steadies After Steep Fall Triggered By Hawkish Fed

(RTTNews) - Gold prices were a tad higher on Thursday as easing geopolitical tensions offset pressure from a stronger dollar and higher Treasury yields.

Spot gold edged up 0.3 percent to $4,268.61 an ounce, after having fallen 1.7 percent on Wednesday on the back of hawkish Fed policy and upbeat retail sales and housing data released overnight. U.S. gold futures were down more than 2 percent at $4,285.70.

The Federal Reserve held its benchmark interest rate steady on Wednesday but Chair Kevin Warsh's focus on "price stability" signaled an increasingly hawkish pivot.

On the geopolitical front, a host of reports showed U.S. President Donald Trump and his Iranian counterpart had remotely signed a preliminary agreement to end the 110-day conflict.

The official text of the memorandum of understanding reached over the weekend has been released, which include the immediate and permanent termination of military operations on all fronts, including in Lebanon, the reopening of the Strait of Hormuz, and the lifting of a U.S. naval blockade against Iran.

Iran has committed to "downblending" its stockpile of highly enriched uranium, with a senior official calling it a "significant concession" by Iran. The sanctions relief is tied to the nuclear settlement.

Iran will receive waivers for crude oil exports, petroleum products and associated banking services immediately upon the signing of the MOU.

Israel was not a party to the negotiations or the MOU. All the technical details will be ironed out in the 60-day negotiating period that commences after the scheduled signing ceremony taking place in Switzerland on Friday.

Brent crude futures fell toward $78 a barrel as focus shifted to the prospect for a swift reopening of the Strait of Hormuz.

Elsewhere, the Swiss National Bank left its policy rate unchanged at zero percent earlier today, despite rising inflation.

The Bank of England is set to keep interest rates unchanged at 3.75 percent later today.

In economic releases, May's leading indicators, June's Philadelphia Fed Index reading and weekly jobless claims data will be in the spotlight in the New York session.