Gold Prices Hold Steady Amid US-Iran Tensions and Fed Outlook
Gold prices held steady on Tuesday as traders monitored diplomatic efforts to ease tensions between the US and Iran, which has been driving up energy prices and inflationary pressures. The US Federal Reserve's next move is also in focus, with President Donald Trump's latest offer of talks to Tehran seen as a positive signal.
Despite high energy prices stoking inflationary pressures and raising the likelihood that interest rates will stay higher for longer, gold has declined by over 20% since the US-Iran conflict began in late February. However, Fed officials opted to keep policy unchanged when they met last week, with three dissents in favor of a hike.
According to Goldman Sachs Group Inc., re-accelerating central-bank gold demand, led by China, should help gold prices rebound despite temporary downside price pressure from energy and rates markets. In contrast, Citi Research analysts predict that gold could stagnate or decline over the next month before rallying to $4,500 an ounce in the fourth quarter.
Spot gold added 0.1% to $4,057.16 an ounce on Tuesday morning, while silver was up 1% at $58.58 an ounce. Platinum and palladium also edged higher.