Gold Holds Steady Amid Middle East Turmoil and Hawkish Fed Bets

Gold prices remained steady on Tuesday as investors continued to monitor developments in the Middle East and looked ahead to US jobs reports for clues on interest-rate decisions. Spot gold held its ground at $4,055.39 per ounce, while US gold futures rose 0.6% to $4,055.10.

US President Donald Trump said that talks with Iran were underway, describing it as a 'last chance' for Tehran to sign a good deal to end the five-month-old war. However, Iran denied any negotiations or plans. The conflict has driven up energy costs and stoked inflation fears, which could prompt central banks to increase interest rates.

The Federal Reserve is set to make its next move in September, with traders pricing in a 65% chance of a rate hike. Federal Reserve Bank of New York President John Williams expressed optimism that inflation pressures will ease gradually, but warned that if they don't, the central bank won't hesitate to respond with rate hikes.

This week's packed labour market reports include US job opening data due later in the day, the ADP employment report on Wednesday, and Friday's nonfarm payrolls figures. The manufacturing sector showed a strong increase in July, but supply chains are strained due to the Middle East conflict.