Khaberni - Gold prices stabilized considerably on Tuesday amid investor caution over tensions in the Middle East, after reports indicated that U.S. President Donald Trump believes that the war on Iran could end soon.
Gold prices in spot transactions fell by one percent to 5131.24 dollars per ounce, at 00:51 Greenwich Mean Time. U.S. futures contracts for gold for April rose by 0.7 percent to 5141.40 dollars.
The dollar declined by 0.4 percent, making gold priced in it cheaper for holders of other currencies.
Trump expected on Monday a swift end to the war - sooner than the initial timeframe he set, which was four weeks - even as hardline Iranian conservatives rallied behind the new supreme leader, Mojtaba Khamenei, indicating their readiness not to back down anytime soon.
The war caused the closure of the Strait of Hormuz, a vital passage for a fifth of the world's oil and liquefied natural gas, leading to a halt in oil tankers for more than a week and forcing producers to stop production as storage filled up, which increased energy prices.
The rise in energy costs exacerbated concerns about inflation and further reduced the likelihood of the Federal Reserve (the U.S. central bank) cutting interest rates in the near term.
Gold is seen as a hedge against inflation, but lower interest rates enhance its attractiveness as a safe haven.
The markets are now awaiting the U.S. Consumer Price Index for February, set to be released tomorrow, Wednesday, and the Personal Consumption Expenditures index - the Federal Reserve's preferred inflation measure - on Friday.
For other precious metals, the price of silver in spot transactions rose by 0.4 percent to 87.32 dollars per ounce. The price of platinum fell by 0.6 percent to 2168.52 dollars, and the price of palladium declined by 0.1 percent to 1689.11 dollars.
