Gold prices held steady on Thursday as market players remained cautious about the direction of US-Iran ceasefire talks, with a key US inflation report due later in the day also in focus for interest rate clues.
Spot gold was little changed at $4,713.79 per ounce, as of 0311 GMT. US gold futures for June delivery fell 0.8 per cent to $4,736.50.
“It doesn’t seem like gold is looking to do much at this moment. I think there’s still a lot of speculation on what’s going to happen after the ceasefire,” said GoldSilver Central Managing Director Brian Lan.
Lan said he expected gold to consolidate between $4,607 and $4,860 in the near term.
On Wednesday, Israel pounded Lebanon with its heaviest strikes yet, killing hundreds of people and drawing a threat of retaliation from Iran.
Oil prices rose on Thursday on concerns that supply from the key Middle East producing region may not fully resume amid doubts that the two-week ceasefire between the US and Iran will hold.
Spot gold has declined more than 10 per cent since the US-Israeli war on Iran began on February 28, as higher energy prices fuelled inflation concerns and prompted markets to reassess interest rate expectations.
Non-yielding gold tends to do well in low-interest-rate environments.
Minutes from the Federal Reserve’s March 17 to 18 meeting showed that more policymakers felt rate hikes could be needed to counter inflation that continued to exceed the central bank’s 2 per cent target, particularly in light of the Iran war.
Investors are now waiting for key US inflation indicators, including the Personal Consumption Expenditures data for February due later in the day, and March consumer price data due on Friday for clues on the Fed’s policy path.
“Beyond near-term liquidity needs, we expect gold to continue to rebuild its gains in the coming months amid heightened geopolitical risk,” Standard Chartered said in a note on Wednesday.
Among other metals, spot silver fell 0.5 per cent to $73.71 per ounce, platinum lost 0.6 per cent to $2,017.26 and palladium slid 0.4 per cent to $1,549.18.