Gold falls as dollar rises amid anticipation over US-Iran talks

Gold prices fell on Tuesday as the dollar rose, while investors waited to see if the United States and Iran would meet this week for peace talks following renewed tensions.

Spot gold fell 0.2% to $4,807.91 per ounce by 02:17 GMT, continuing its decline from the previous session when it hit its lowest level since April 13. US gold futures for June delivery held steady at $4,827.30.

The dollar rose, increasing the cost of dollar-denominated goods for holders of other currencies.

Kyle Roda, financial markets analyst at Capital.com, said investors are now waiting for "the next major news about whether talks will proceed in Islamabad, and if so, whether the ceasefire will be extended, or better yet, a peace deal reached."

Roda added: "If these things happen, gold is likely to get strong support because oil prices will fall. And if these things don't happen, we may start seeing some of these fluctuations return to the market."

Oil prices fell as investors reassessed supply risks amid expectations of US-Iran peace talks this week, which would allow more crude flow from the Middle East.

Higher oil prices exacerbate inflation by increasing transportation and production costs. Gold is considered a hedge against inflation, but rising interest rates increase demand for yield-bearing assets, reducing its attractiveness.

A senior Iranian official told Reuters on Monday that Iran is considering participating in peace talks in Pakistan, following Islamabad's efforts to end the US blockade.

The blockade poses a major obstacle to Tehran's return to peace efforts, as the current two-week ceasefire nears its end.

The two-week ceasefire in the conflict, which has killed thousands and severely damaged the global economy — especially energy markets — is set to expire this week.

Gold prices have fallen by about 8% since the United States and Israel launched their strikes on Iran in late February.

For other precious metals, spot silver fell 0.6% to $79.40 per ounce, platinum lost 0.7% to $2,074, while palladium rose 0.3% to $1,556.16.