Gold trimmed earlier losses but remained under moderate pressure below the US$5,000 mark in thin Asian trade on Tuesday, as investors looked ahead to United States-Iran nuclear talks for fresh direction.
By 3:30 pm AEDT (4:30 am GMT), spot gold was down 0.7% at US$4,959.74 per ounce.
The precious metal has declined for a second consecutive session, weighed down by subdued demand from major Asian trading hubs, including mainland China and Hong Kong, where markets are shut for the week-long Lunar New Year holidays.
Analysts at ANZ said in a client note: "The recent crackdown on speculative trading in China's precious metals sector has heightened concerns regarding futures positions. Both silver and gold have declined in trading volumes, and the market currently lacks clear direction as it remains closed for the Lunar New Year.
"Nevertheless, wholesale demand remained robust ahead of the spring holidays, and the latest price pullback is likely to trigger further pent-up demand for gold.
"As expected, India’s gold imports surged in January as buyers moved to secure supplies in anticipation of import duty hike in the 2026-27 budget. "
Meanwhile, the U.S. dollar has held on to recent gains, supported in part by rebalancing flows, even as markets continue to price a dovish outlook from the Federal Reserve.
According to the CME Group FedWatch Tool, investors are currently pricing in at least two 25-basis-point rate cuts by the Fed this year. Minutes from the Fed’s January policy meeting, due later this week, will be closely examined for further clues on the likely path of monetary easing.
Lower interest rate expectations typically support non-yielding assets such as gold, but near-term price action has been dominated by positioning and geopolitical developments.
Before those U.S. data and policy events, markets are focused on high-level talks between Washington and Tehran over Iran’s nuclear programme, scheduled to take place in Geneva on Tuesday.
Adding to geopolitical tensions, the semi-official Tasnim news agency reported that Iran’s Revolutionary Guards navy conducted a drill in the Strait of Hormuz on Monday, a vital shipping route for global energy supplies.
