Khaberni - Gold prices stabilized on Tuesday as investors held onto their caution ahead of the deadline set by U.S. President Donald Trump for Iran to reopen the Strait of Hormuz.
Gold dropped in spot transactions by 0.1 percent to $4640.93 per ounce by 03:27 GMT, while U.S. futures for gold delivery in June fell by 0.4 percent to $4666.70.
Ilya Spivak, head of global macroeconomics at Testy Live—a platform for trading financial derivatives—said, "Everyone is in anticipation to see the outcome that these sharp statements made by the president over the past few days will lead to."
Iran said on Monday that it wants a permanent end to the war with the United States and Israel, and rejected pressures to reopen the Strait of Hormuz, while Trump warned that Iran could be "erased" if it does not comply with the deadline set for reaching an agreement, which expires this evening, Tuesday.
Oil prices continued their gains, stabilizing above $110 per barrel as Trump intensified his rhetoric against Iran.
The sharp rise in oil prices has exacerbated concerns about inflation. While gold typically benefits during periods of inflation pressure, rising interest rates decrease its attractiveness as it is a non-income-generating asset.
According to the Fed Watch tool of the CME Group, the markets do not widely anticipate any interest rate cuts by the Federal Reserve (the U.S. central bank) this year.
Investors are now awaiting the minutes from the Federal Reserve's monetary policy meeting in March, which will be released tomorrow, Wednesday, in addition to U.S. inflation indicators such as personal consumption expenditures data and the consumer price index, which are to be released later in the week.
As for other precious metals, silver dropped in spot transactions by 0.9 percent to $72.17 per ounce, platinum fell by 1.1 percent to $1958.75, and palladium lost 0.5 percent to $1478.49.
