Gold prices remained relatively stable on Tuesday as investors evaluated the economic implications of rising tensions in the Middle East and stalled peace negotiations between the United States and Iran.
Spot gold edged up 0.2% to $4,528.99 per ounce as of 0059 GMT, after dropping more than 2% in the previous session to its lowest level since March 31.
US gold futures for June delivery also saw a slight increase of 0.1%, reaching $4,538.20.
Escalating conflict in the Gulf added to market uncertainty, with the US and Iran launching fresh attacks on Monday amid a struggle for control of the Strait of Hormuz, disrupting a fragile truce.
The US military reported destroying six Iranian small boats and intercepting cruise missiles and drones, as Tehran attempted to counter US efforts to secure shipping routes through the strait.
Meanwhile, US crude prices fell more than 1% as markets weighed the effects of Iranian attacks on vessels and reports that a US-flagged Maersk-operated ship successfully passed through the strait under US military escort.
New York Federal Reserve President John Williams stated that US monetary policy is “well-positioned” to manage the economic uncertainty arising from the Middle East conflict. He added that once inflation pressures ease, the central bank may shift focus back toward lowering interest rates.
US President Donald Trump also reiterated on social media that interest rates remain too high and called again for rate cuts.
Holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, remained unchanged at 1,040.66 metric tons as of Friday.
Among other precious metals, spot silver rose 0.1% to $72.76 per ounce, platinum increased 0.5% to $1,954.80, and palladium gained 0.8% to $1,491.84.
