Gold prices have been trending neutral since last week amid a surge in oil prices that could spark inflation concerns, and it is also a major obstacle for central banks to lower interest rates.
At 9.10 am, gold prices were at $4,775, up 0.75% since it opened early Tuesday in Asian trading.
Gold bullion prices showed a modest recovery after falling earlier, driven by the latest developments involving Donald Trump.
The US President announced that Vice President JD Vance had played a good role in dealing with Iran, while stating that the country now appears to want to reach an agreement immediately.
Trump also stressed that Iran still did not agree to stop developing nuclear weapons. He added that the United States would not allow any form of pressure on the world, and vowed to recover the nuclear material involved.
In currency developments, the US Dollar weakened after the statement. The US Dollar Index, which measures the dollar's performance against six major global currencies, turned negative, falling around 0.09% to 98.61 on the trading day.
At the same time, the United States implemented sanctions on the Strait of Hormuz starting Monday. This measure is intended to restrict the movement of Iranian-flagged ships and ships from other countries departing from Iranian ports, thus increasing geopolitical tensions in the region.
Economic data also showed that Existing Home Sales in the US fell to a nine-month low of 3.98 million units in March after falling 3.6% month-on-month.
However, this data was not given much attention as the market was more focused on the development of the US-Iran conflict.
Meanwhile, the President of the Federal Reserve Bank of San Francisco, Mary Daly, stated that the latest inflation report did not bring any major surprises to the market. She indicated that interest rates are likely to be maintained, unless inflation remains high for longer than expected.
The US Consumer Price Index (CPI) for March rose to 3.3% year-on-year, indicating that price pressures remain.
Meanwhile, prolonged uncertainty in the Middle East has led investors to reduce expectations for monetary policy changes, with markets now seeing the Federal Reserve more likely to maintain its current stance.
