NEW YORK: Gold gained on Tuesday as oil prices slipped after US President Donald Trump said talks with Iran were ongoing, while markets focused on developments in the Middle East and upcoming US economic data.
Spot gold was up 0.9percent to USD4,522.28 per ounce as of 0848 a.m. EDT (1248 GMT) after falling as much as 2percent on Monday. US gold futures gained 1percent to USD4,552.00.
Gold market trajectory “depends on the direction of oil prices, bond yields, and the US dollar - all of that, in turn, is tied to the Middle East situation,” said Fawad Razaqzada, market analyst at Forex.com.
“For me to turn bullish on gold again, we need to see at least some renewed upside momentum suggesting that buyers are coming back. At the moment, however, the market seems directionless, with participants largely waiting for cues, particularly from the Middle East.”
On the geopolitical front, Iran is reviewing a proposed agreement with the United States to halt the war between the two countries, Iran’s Mehr news reported, after Trump said talks to reach a deal were continuing.
Oil prices fell after the previous session’s sharp gains. Since the start of the conflict, gold has come under pressure as a surge in energy prices has stoked inflation worries and expectations of elevated interest rates.
Although gold is typically viewed as a hedge against inflation, it tends to lose its attractiveness as a non-yielding asset when interest rates are high.
Data due this week include US job openings later in the day, the ADP employment report on Wednesday, and Friday’s employment report. Markets will scan the data for cues on the Federal Reserve’s policy path. Commerzbank expects gold at USD4,800 per troy ounce by the end of this year, down from its previous forecast of USD5,000.
It maintained its forecast of USD5,200 per for the end of 2027 and noted that structural factors supporting gold remain entirely intact. “In addition to the lowered gold price forecast, weaker industrial demand for silver also points to a slightly lower silver price,” Commerzbank added.
Spot silver rose 2.1percent to USD76.37 per ounce. Platinum gained 2.2percent to USD1,966.65 and palladium rose 1.7percent to USD1,385.37.