Gold prices held firm above the US$4,300 level during Asian deals on Tuesday, as investors reassessed geopolitical developments and prepared for a key Federal Reserve policy meeting.
By 3:50 pm AEST (5:50 am GMT), spot gold was trading 0.2% higher at US$4,317.84 an ounce.
The precious metal paused its recent three-day recovery as traders became more cautious about the durability of a tentative peace agreement between the United States and Iran.
The agreement, announced on Sunday, paved the way for the reopening of the Strait of Hormuz and initially boosted risk appetite across global markets.
However, investor optimism has moderated as questions remain over the details and long-term sustainability of the accord.
Market participants have also shifted their attention toward upcoming central bank decisions, particularly the U.S. Federal Reserve's policy meeting, which is set to conclude on Wednesday (Thursday AEST).
The meeting will be the first chaired by Kevin Warsh since he succeeded Jerome Powell, adding further significance to the event for financial markets.
As investors position ahead of the Fed's decision, the U.S. dollar has regained some ground after weakening sharply following the announcement of the preliminary U.S.-Iran agreement.
Despite ongoing efforts by U.S. President Donald Trump to promote the agreement, markets remain cautious amid unresolved regional tensions.
Trump recently stated in a Truth Social post that “Iran has agreed to never have a Nuclear Weapon!”
At the same time, security concerns in the region continue to support some safe-haven demand.
The Israeli military said late Monday that the Iran-backed Lebanese militant group Hezbollah had launched rockets at Israeli forces operating in southern Lebanon.
The ongoing tensions have tempered expectations that the broader regional conflict has been fully resolved despite the diplomatic breakthrough between Washington and Tehran.
