Gold prices moved lower during Asian trading on Tuesday as investors assessed ongoing tensions between the United States and Iran while awaiting a closely watched meeting between Donald Trump and Chinese President Xi Jinping later this week.
Spot gold fell 0.7% to $4,702.84 an ounce by 02:52 ET (06:52 GMT), while U.S. gold futures declined 0.4% to $4,710.66 an ounce.
Other precious metals also weakened, with spot silver dropping 2.4% to $84.03 per ounce and platinum falling 3.2% to $2,067.19 per ounce.
Trump Warns Iran Ceasefire Remains Fragile
Investor sentiment remained cautious after Trump sharply criticised Iran’s latest response to a U.S.-backed peace proposal, describing it as “a piece of garbage” and warning that the ceasefire could collapse following weeks of indirect negotiations.
The U.S. president said the truce was on “massive life support,” fuelling concerns that tensions in the Gulf region could escalate once again.
Iranian officials responded by stating that the country’s armed forces were ready to react decisively to any “act of aggression.”
Tehran also defended its negotiating demands, insisting that requests involving sanctions relief, the restoration of oil exports and recognition of Iran’s sovereignty over the Strait of Hormuz were legitimate.
Oil prices remained elevated on Tuesday amid fears that further disruption around the Strait of Hormuz could threaten global crude supplies.
The rise in oil prices has limited support for bullion markets, as investors worry that persistently high energy costs could increase inflationary pressure and encourage the Federal Reserve to keep interest rates elevated for longer. Higher borrowing costs generally reduce demand for non-yielding assets such as gold.
Markets Focus on U.S. Inflation Data and Trump-Xi Meeting
Investors are also closely watching Trump’s expected meeting with Xi Jinping in Beijing later this week.
Discussions between the two leaders are expected to cover several major geopolitical and economic issues, including Iran, Taiwan, trade relations, artificial intelligence and energy security.
Attention is also turning toward upcoming U.S. inflation figures, particularly the Consumer Price Index report due later Tuesday, which could provide further guidance on the Federal Reserve’s future interest-rate path.
The U.S. Dollar Index rose 0.2% during Asian trading, making gold more expensive for holders of other currencies.
In industrial metals markets, benchmark copper futures on the London Metal Exchange edged 0.3% lower to $13,848.13 per ton, while U.S. copper futures fell 0.6% to $6.45 per pound.