Gold fell from a three-week high on Tuesday, as slim hopes of a US-Iran peace deal drove the dollar and oil prices higher, clouding the US interest rate outlook ahead of key inflation data.<\/p>\n
Spot gold fell 0.8% to $4,696.07 per ounce by 1117 GMT, after climbing to its highest since April 21 earlier. US gold futures for June delivery lost 0.5% to $4,703.20.<\/p>\n
US President Donald Trump said a ceasefire with Iran was “on life support” as Tehran rejected a US proposal to end the conflict and stuck to a list of demands the US president described as “garbage”, Reuters reported. <\/p>\n
“The overall driver (for gold’s decline) is rising energy prices once again lifting US bond yields ahead of today’s CPI (consumer price index) print, as well as a stronger dollar,” said Ole Hansen, head of commodity strategy at Saxo Bank.<\/p>\n
Oil climbed as the key Strait of Hormuz stayed largely closed.<\/p>\n
The April inflation data, expected later in the day, could provide clues on the Federal Reserve’s monetary policy direction.<\/p>\n
Elevated crude oil prices can stoke inflation, increasing the likelihood of higher interest rates. While gold is seen as a hedge against inflation, high rates tend to weigh on the non-yielding asset.<\/p>\n
Benchmark 10-year US Treasury yields hit a one-week high, while the dollar gained 0.4%, making dollar-denominated commodities more expensive for holders of other currencies.<\/p>\n
Traders have largely priced out a Fed rate cut this year, with markets now seeing a 36% chance of a hike by March 2027, according to CME Group’s FedWatch tool.<\/p>\n
Markets are also watching Trump’s two-dayvisit to Chinafrom Wednesday, during which he is set to meet Chinese President Xi Jinping, with the Middle East expected to be a key part of the agenda.<\/p>\n
“Overall, gold remains rangebound, with support established ahead of $4,500, while resistance is at the 50-day moving average, near $4,757,” said Hansen.<\/p>\n
Spot silver fell 3% to $83.50 per ounce, platinum slid 2.7% to $2,077.44, and palladium was down 1.9% at $1,479.91. <\/p>\n<\/p><\/p>\n