Gold prices dipped on Monday, as investors were cautious following a diplomatic setback between the U.S. and Iran and ahead of a key Federal Reserve interest rate decision later this week.

At 15:45 ET (19:45 GMT), spot gold was down 0.6% to $4,681.39/oz, while gold futures fell 1% to $4,694.61/oz.

Goldman Sachs says the U.S. dollar outlook is being shaped by an unexpectedly muted supply shock from ongoing Middle East disruptions, even as energy markets remain a key risk for FX.

In a note, the bank describes the situation as “the curious case of the shrinking supply shock,” arguing that while higher energy prices and product shortages are reshaping global balances, the real economic impact has so far been less visible than initially feared.

Oil prices whipsawed in volatile trade on Friday, but were higher on the week, as traders weighed supply disruptions against the potential restart of peace talks between the U.S. and Iran that could help limit those disruptions.

Bitcoin continues to show remarkable resilience this Saturday, holding steady at $77,743.7 as of 05:46 ET (10:46 GMT). 

The digital asset has previously shown sensitivity to wartime volatility, but it is currently navigating a high-stakes weekend as U.S. negotiators Jared Kushner and Steve Witkoff head to Pakistan for renewed talks with Iranian officials. 

Investors are closely monitoring the potential for a breakthrough in the eight-week conflict, with any signs of de-escalation likely to provide a tailwind for broader risk-on sentiment.