Gold prices remained largely steady on Tuesday following a recent dip, with spot gold unchanged at $4,820.84 per ounce as of 0101 GMT, according to Reuters. The precious metal had fallen to its lowest level since April 13 in the previous session, dropping to a one-week low before recovering. U.S. gold futures for June delivery rose 0.3% to $4,841.20, indicating some recovery from the recent decline. As per Reuters, investors are closely watching for potential peace talks between the United States and Iran this week after renewed tensions over the weekend.
Iran is considering attending peace talks with the United States in Pakistan, a senior Iranian official told Reuters on Monday, following moves by Islamabad to end a U.S. blockade of Iran's ports. This development comes as the two-week ceasefire to the conflict that has killed thousands and roiled the global economy is set to expire this week. The potential peace talks have created cautious optimism among investors, with analysts noting that markets did not fully retrace Friday's moves, signaling that an eventual deal remains achievable. According to OCBC analysts, markets are back in wait-and-see mode after the Strait of Hormuz was re-closed over the weekend and the U.S. seized an Iranian vessel, but importantly, markets did not fully retrace Friday's moves, signaling cautious optimism that an eventual deal is still achievable.
Renewed tensions over the weekend had previously impacted markets, including the re-closure of the Strait of Hormuz and the U.S. seizure of an Iranian vessel. As reported by Reuters, markets are now back in wait-and-see mode following these developments. The re-closure of the Strait of Hormuz, a key shipping route for oil, had raised supply concerns and contributed to the recent volatility in gold prices. The U.S. seizure of an Iranian vessel has created additional supply disruption concerns in the region. However, recent reports indicate that both sides are considering a two-week extension of the ceasefire to allow additional time for negotiations, with a second round of talks expected in the near term.
Oil prices fell as investors reassessed supply risks on expectations that peace talks between the U.S. and Iran will take place this week and allow more supply to flow from the key Middle East producing region. According to Reuters, this development has created a more stable outlook for energy markets, which had been impacted by the weekend tensions and supply disruption concerns. The expectation of increased oil supply from the Middle East region has helped ease some of the supply-side pressures that had previously supported higher energy prices. Oil prices tumbled more than 10% in response to the temporary reopening of the Strait of Hormuz and reports of potential ceasefire extensions, helping to alleviate inflationary pressures.
Meanwhile, Kevin Warsh, U.S. President Donald Trump's nominee to lead the Federal Reserve, will tell lawmakers at his Senate confirmation hearing on Tuesday that he is 'committed to ensuring that the conduct of monetary policy remains strictly independent,' according to prepared remarks released on Monday. Additionally, SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, said its holdings rose 0.7% to 966.72 metric tons on Friday, indicating continued investor interest in gold despite the recent price volatility. Among other precious metals, spot silver fell 0.1% to $79.82 per ounce, platinum lost 0.1% to $2,087.15, while palladium was up 0.8% at $1,564.48.
