Gold prices held steady around $4,360 an ounce, experiencing fluctuations throughout Tuesday before closing up 0.4%. This stability was largely influenced by ongoing diplomatic efforts between the US and Iran, which could impact global energy prices and, consequently, the Federal Reserve's monetary policy decisions.
Optimism regarding these talks emerged after President Donald Trump described a "very good" meeting with Iranian envoys in New York. This development contributed to a continued decline in oil prices, with West Texas Intermediate falling over 10% since the previous Tuesday's close. Reports of Saudi Arabia's plans to resume crude exports via its East-West pipeline, bypassing the Strait of Hormuz, also added downward pressure on oil.
However, the potential for further Federal Reserve interest rate hikes provided a counteracting force against gold's upward momentum. Following the Fed's first rate increase in three years last week, Richmond Fed President Tom Barkin warned that inflationary pressures might take time to ease, although he did not explicitly call for additional tightening. Higher borrowing costs generally make non-yielding assets like gold less attractive.
Despite these factors, gold imports into China, the world's largest consumer, have surged this year, reaching over 1,000 tons through August. This figure surpasses the total for all of 2025, driven by lower international gold prices and a stronger yuan. Spot gold saw a slight increase of 0.1% to $4,363.50 an ounce in early Singapore trading, with other precious metals also seeing modest gains.
