Gold prices eased during Tuesday's Asian deals after reaching their highest levels in three weeks, as investors locked in profits ahead of closely watched United States inflation data and monitored ongoing tensions in the Middle East.
Spot gold climbed to around US$4,773 per ounce during early Asian trading before retreating later in the session.
By 3:30 pm AEST (5:30 am GMT), spot gold was trading 0.3% lower at US$4,720.05 per ounce.
The pullback followed two consecutive sessions of gains, with traders reducing positions ahead of the release of the U.S. consumer price index (CPI) report, which is expected to provide fresh guidance on the Federal Reserve’s interest rate outlook.
Market sentiment was also influenced by fading hopes for a diplomatic breakthrough between Washington and Tehran before this week’s expected meeting between U.S. President Donald Trump and Chinese President Xi Jinping.
Despite the decline, gold remained supported above the US$4,700 level as investors continued to seek safe-haven assets amid rising geopolitical and inflation risks.
On the geopolitical front, tensions between the United States and Iran remained elevated after Trump said the ceasefire between the two nations was on "life support".
Axios also reported that Trump met with his national security team on Monday to discuss possible next steps in the conflict, including the potential resumption of military action.
The ongoing standoff has contributed to higher oil prices, raising concerns that elevated energy costs could feed into broader inflation and complicate the Federal Reserve’s policy outlook.
Investors are now focused on the upcoming U.S. CPI report, which could significantly influence expectations for future interest rate decisions and determine gold’s next major move.
Economists expect U.S. CPI to rise 3.7% annually in April, with monthly inflation forecast to increase 0.6%.
