Gold prices saw a marginal decline on Tuesday amid geopolitical tensions and a ceasefire in the Middle East remaining uncertain. Markets are now also betting that the Federal Reserve will cut interest rates later this year. Uncertainty surrounding the ceasefire in the Middle East has left gold prices uncertain. This ongoing conflict had previously spurred demand for safe-haven assets like gold, which propelled its prices to an all-time high of $2,431.29 on April 12.
In Saudi Arabia, 24-carat gold saw a 0.14 percent decline to SAR279.71 per gram and SAR8,699.93 per ounce.
Globally, spot gold saw a 0.06 percent decline to $2,322.56 per ounce, as of 5:14 GMT, after rising more than 1 percent in the previous session. Meanwhile, U.S. gold futures saw a 0.01 percent decrease to $2,331.0.
U.S. interest rate timing
Analysts highlighted the gradual establishment of a support base for gold prices around the $2,280 mark over the past week. Statements from Federal Reserve officials indicating a potential future interest rate cut bolstered this sentiment.
Federal Reserve Bank of New York President John Williams stated on Monday that the central bank will lower its interest rate target. However, he did not specify a timing but said that the economy was moving back into better balance.
Traders are currently pricing in a 64 percent probability of a Fed interest rate cut in September, according to CME’s FedWatch Tool. Lower interest rates tend to increase the attractiveness of holding gold, particularly as it is a non-interest-bearing asset.
Read: Oil prices up amidst global tensions, concerns about sluggish demand and reduced supplies
Other precious metals
In addition to gold prices, spot silver fell 0.50 percent to $27.32 per ounce, while platinum gained 0.93 percent to $963.30. Meanwhile, palladium saw a 0.24 percent increase to $980. Analysts noted that China’s scrappage scheme could potentially drive up electric vehicle sales, subsequently increasing the secondary palladium supply.
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