Uncertainty over US-Iran negotiations tempers demand for the safe-haven asset, pushing prices lower in early trading.
Gold (XAU/USD) retreated to near $4,050 in early Asian trading Tuesday, paring gains from a recent rally. The decline follows the US decision to pause planned airstrikes against Iran, shifting focus to diplomatic efforts.
Prices had climbed in prior sessions amid geopolitical tensions, but traders now await clarity on US-Iran talks. The US signaled negotiations could resume within days, while Iran denied direct talks but acknowledged progress with Oman on maritime access.
Market reaction remains cautious, with gold’s appeal as an inflation hedge diminished by elevated interest rates. The Fed held rates steady at 3.50%-3.75% last week, reinforcing its commitment to curbing inflation.