Gold prices edged higher during Asian trade on Tuesday as investors balanced renewed uncertainty surrounding the United States-Iran conflict against a stronger U.S. dollar and looked ahead to a series of key U.S. labour market reports.
By 4:25 pm AEST (6:25 am GMT), spot gold was up 0.2% at US$4,064.34 an ounce.
The precious metal traded around the US$4,050 level as markets awaited the U.S. JOLTS Job Openings Survey, due later on Tuesday, which marks the first in a series of employment reports culminating in Friday's closely watched non-farm payrolls release.
President Donald Trump said on Monday that the United States was engaged in talks with Iran, describing the discussions as Tehran's "last chance" to reach a favourable agreement and end the five-month-old conflict.
Iran, however, rejected the claim, saying no negotiations were underway or planned.
Economic data released on Monday also underpinned the greenback after the Institute for Supply Management said its Manufacturing PMI rose to 55.6 in July from 53.3 in June, the highest reading since May 2022 and above market expectations of 54.0.
Investors also continued to monitor the U.S. Federal Reserve's policy outlook following a New York Times report that Chair Kevin Warsh is considering whether the central bank should hold fewer policy meetings each year, helping sustain demand for the U.S. dollar.
Markets remain focused on developments in the Middle East, particularly any diplomatic progress and the reopening of the Strait of Hormuz, while attention will also turn to this week's U.S. labour market data for further clues on the Federal Reserve's interest rate path.
Friday's non-farm payrolls report is expected to be the week's key event, with the data likely to influence expectations for monetary policy amid ongoing inflation concerns.
According to the CME Group FedWatch Tool, markets continue to price in a 64.7% chance of a Federal Reserve interest rate increase in September after policymakers left rates unchanged at their July meeting.
