Gold edged higher on Tuesday as investors weighed mixed signals surrounding potential U.S.-Iran talks and awaited a series of U.S. labor-market reports for clues about the Federal Reserve’s interest-rate path.

Spot gold rose 0.2% to $4,061.96 per ounce, while U.S. gold futures gained 0.7% to $4,118.30.

Markets Await U.S. Labor Data

Key reports scheduled for release this week include job openings data, the ADP employment report and nonfarm payrolls.

Weak labor-market figures could put pressure on the U.S. dollar and support gold prices. Conversely, stronger employment data may reinforce expectations that the Fed will maintain a tighter monetary-policy stance.

Markets are currently pricing in around a 65% probability of a Fed rate increase in September.

U.S.-Iran Tensions Remain Uncertain

U.S. President Donald Trump said talks with Iran were underway and warned that this could be Tehran’s “last chance” to reach a favorable agreement. Iran, however, denied that negotiations were taking place or being planned.

The conflict has pushed energy costs higher and increased inflation concerns. This creates a two-sided impact on gold: geopolitical risks support safe-haven demand, while expectations of higher interest rates reduce the appeal of the non-yielding metal.

Citi Sees Near-Term Consolidation Before a Potential Rally

Citi expects gold prices to remain stagnant or decline over the next month before rising to $4,500 per ounce in the fourth quarter and reaching $5,000 per ounce in the first half of next year.

Other precious metals also moved higher:

• Silver gained 1.2% to $58.88 per ounce

• Platinum rose 1.3% to $1,648.97

• Palladium increased 1.1% to $1,278.38

Conclusion

Gold remains in a consolidation phase, influenced by both Middle East tensions and expectations for Federal Reserve policy. In the short term, U.S. labor-market data will be a key factor shaping the direction of the dollar and precious metals.

Source: Reuters