Gold prices stabilized on Tuesday as investors maintained caution ahead of the deadline set by U.S. President Donald Trump for Iran to reopen the Strait of Hormuz.

 

Spot gold edged down by 0.1% to $4,640.93 per ounce as of 03:27 GMT, while U.S. gold futures for June delivery declined by 0.4% to $4,666.70.

 

Ilya Spivak, head of global macro at Tastylive, a derivatives trading platform, said, “Everyone is in a wait-and-see mode regarding the outcome of the sharp statements made by the president over the past few days.”

 

Iran said on Monday that it seeks a permanent end to the war with the United States and Israel and rejected pressure to reopen the Strait of Hormuz. Meanwhile, Trump warned that Iran could be “wiped out” if it does not comply with the deadline he set to reach an agreement, which expires later on Tuesday.

 

Oil prices continued their gains, holding above $110 per barrel as Trump intensified his rhetoric against Iran.

 

The sharp rise in oil prices has increased concerns about inflation. While gold typically benefits during periods of inflationary pressure, higher interest rates reduce its attractiveness as a non-yielding asset.

 

According to the CME Group’s FedWatch tool, markets largely see no chance of interest rate cuts by the Federal Reserve this year.

 

Investors are now awaiting the minutes of the Federal Reserve’s March policy meeting, due on Wednesday, along with U.S. inflation indicators such as personal consumption expenditures data and the consumer price index, expected later in the week.

 

As for other precious metals, spot silver fell by 0.9% to $72.17 per ounce, platinum declined by 1.1% to $1,958.75, and palladium dropped by 0.5% to $1,478.49.