Gold prices fell on Tuesday. Spot gold fell 0.5 per cent to $4,544.17 per ounce. U.S. gold futures for June delivery lost 0.2 per cent to $4,547.70. However, the bullion stayed above a 1-1/2-month low hit in the last session, as markets consolidated while awaiting further developments after U.S. President Donald Trump paused a planned attack against Iran. Spot silver fell 2.1 per cent to $76.02 per ounce, platinum lost 0.5 per cent to $1,969.05, and palladium dropped 1.5 per cent to $1,397.23.
Oil prices fell more than 2 per cent, easing some inflation fears. Gold is considered a hedge against inflation, though higher interest rates tend to weigh on the non-yielding metal.
Earlier, Gold prices fell 2.4 per cent on Friday in their biggest one-day decline since March 26 and extended losses on Monday to touch $4,479.54, the lowest level since March 30, as mounting inflation fears triggered a rout in the global bond market. Bullion recovered to close Monday slightly higher.
"It seems like an oscillation in this kind of inflation fear trade and a sort of digestion of the fireworks from Friday," said Ilya Spivak, head of global macro at Tastylive, adding that markets are now awaiting broad sentiment markers such as the minutes of April's FOMC meeting to be released on Wednesday. Bonds steadied following a steep selloff after Trump said on Monday he had paused a planned attack against Iran to allow for negotiations to take place on a deal to end the U.S.-Israeli war, after Iran sent a new peace proposal to Washington.
Kevin Warsh will be sworn in as Fed chair on Friday by Trump, a White House official said on Monday, putting the financier at the helm of the central bank as it grapples with intensifying inflation that may make it hard to push through the interest-rate cuts Trump desires.
