Gold prices were steady on Tuesday as easing oil prices, driven by de-escalating Middle East tensions, counterbalanced expectations of further US interest rate hikes ahead of key inflation data later this week.
Spot gold was unchanged at US$4,327.42 per ounce (≈₦5.89 million) as of 0850 GMT, after touching its lowest level since late March in the previous session.
US gold futures for August delivery slipped 0.3 percent to US$4,351.30 (≈₦5.92 million).
Inflation outlook keeps pressure on bullion
Analysts said bullion remained under pressure from rising expectations that the US Federal Reserve may keep monetary policy tight for longer following stronger-than-expected labour market data.
Markets are now pricing in a more than 70 percent probability of a US rate hike by December, with investors closely watching upcoming inflation reports for further direction.
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Gold, traditionally seen as a hedge against inflation, tends to lose appeal in high interest rate environments as it does not yield returns.
Oil-price drop tempers inflation fears
The metal found some support from a decline in oil prices after Israel and Iran agreed to halt attacks following diplomatic intervention, easing fears of supply disruptions in the Middle East.
Lower crude prices reduce inflationary pressure, which in turn can temper expectations for aggressive monetary tightening by central banks.
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However, analysts said the relief was limited as broader inflation risks remain elevated ahead of US Consumer Price Index data expected this week.
Technical pressure builds
Gold has also come under technical pressure after falling below its 200-day moving average for the first time since October 2023, a signal some analysts interpret as a bearish indicator.
Market strategists warned that sustained trading below this level could open the door to further short-term losses if macroeconomic conditions remain supportive of higher interest rates.
Other precious metals mixed
Other precious metals showed mixed performance. Silver rose 0.4 percent to US$68.48 per ounce (≈₦93,000), platinum gained 0.3 percent to US$1,759.88 (≈₦2.39 million), while palladium climbed 1.7 percent to US$1,225.74 (≈₦1.67 million).
Outlook
Investors are now focused on upcoming US inflation data and Federal Reserve policy signals, which are expected to shape expectations for interest rates and determine the near-term direction of gold and broader commodity markets.
While easing geopolitical tensions have helped stabilise sentiment, analysts caution that persistent inflation risks and a hawkish US policy outlook could continue to weigh on bullion in the weeks ahead.
