Gold prices moved slightly higher on Tuesday but continued to trade within a narrow band, as investors assessed the implications of a U.S. naval blockade on Iran while also awaiting fresh inflation data from the United States.
Despite the modest gains, bullion has largely stayed within the same range seen over the past week, with concerns about inflation linked to the Iran conflict offsetting the usual safe-haven appeal of gold and other precious metals.
Spot gold rose 0.5% to $4,762.42 an ounce as of 01:42 ET (05:42 GMT), while gold futures gained 0.4% to $4,784.05 per ounce. Over the past week, spot prices have mostly fluctuated between roughly $4,700 and $4,900 per ounce.
Other precious metals also advanced, with spot silver climbing 1.4% to $76.6375 per ounce and platinum adding 0.6% to $2,087.69 per ounce.
Softer Dollar Supports Gold as Iran Blockade Unfolds
Gold and broader metals found some support from a weaker U.S. dollar, as markets reacted to tentative signs of easing tensions in the Iran conflict following the launch of a U.S. naval blockade.
Several reports indicated that Washington and Tehran remain open to further negotiations after weekend talks in Pakistan failed to deliver a breakthrough. According to Bloomberg, both sides are considering holding another round of discussions before the current two-week ceasefire expires next week.
U.S. Vice President JD Vance, who led the talks in Pakistan, expressed cautious optimism about progress, noting that it will ultimately be up to Iran to determine whether an agreement can be reached.
The dollar weakened as investor risk appetite improved on hopes of a potential ceasefire, although any agreement still appears some way off. Risk-sensitive assets, particularly equities, posted solid gains at the start of the week.
Markets Await U.S. Inflation Data for Direction
Attention is now turning to upcoming U.S. producer price index (PPI) data, due later on Tuesday, which is expected to provide further insight into inflation trends in the world’s largest economy.
Investors will be watching closely for signs of an energy-driven increase in price pressures during March, especially after last week’s consumer price index data pointed to a sharp acceleration in inflation.
The outbreak of the Iran conflict has significantly disrupted global energy markets, driving oil and gas prices higher as Tehran restricted access to the key shipping route of the Strait of Hormuz.
The surge in energy costs has fueled concerns that inflation could remain elevated, potentially prompting the Federal Reserve and other major central banks to adopt a more hawkish stance in the coming months.
These inflation worries have weighed on gold, pulling prices back from the record highs reached in late January.