recouped early losses on
Monday to trade largely steady, helped by a slightly softer
dollar, while investors looked for progress on the stalled peace
talks between the United States and Iran.
Spot gold was steady at $4,707.75 per ounce, as of
0233 GMT, after shedding 0.8 per cent earlier in the session. Last week,
the metal fell 2.5 per cent to snap a four-week winning streak.
U.S. gold futures for June delivery fell 0.4 per cent to
$4,720.50.
Lending support to bullion, the dollar eased after a report
said that Iran through Pakistani mediators gave the U.S. a new
proposal on reopening the Strait of Hormuz and ending the war.
“We’re just sort of watching now whether there’s progress in
the (U.S.-Iran) talks at all in the coming days and that’s going
to be the biggest driver for gold,” said Kyle Rodda, a senior
financial market analyst at Capital.com.
U.S. President Donald Trump said on Sunday that Iran could
telephone if it wants to negotiate an end to their two-month war
and stressed it can never have a nuclear weapon.
Trump cancelled a trip by two U.S. envoys to Iran war
mediator Pakistan on Saturday, dealing a setback to peace
prospects.
Oil prices rose as the stalled peace talks prolonged the
disruption of Middle East energy exports.
Higher crude oil prices can stoke inflation by raising
transportation and production costs, increasing the likelihood
of higher interest rates.
While gold is considered an inflation hedge, high interest
rates make yield-bearing assets more attractive, weighing on its
appeal.
Investors now await the U.S. Federal Reserve’s interest rate
decision on Wednesday.
“It could either be a support to gold or an increased
headwind, depending on if the Fed sort of indicates whether it
sees itself potentially keeping policy unchanged for the rest of
the year because of the inflationary impacts of the energy
crisis,” said Rodda.
Spot silver fell 0.3 per cent to $75.44 per ounce, platinum
gained 0.1 per cent to $2,013.15 and palladium was down
0.6 per cent at $1,487.45.