Gold prices extended their recovery for a third consecutive session on Tuesday, with the gold market regaining momentum in Asian trading, although the metal remains on track for its worst monthly performance in more than 17 years.
Spot gold rose 1.2% to US$4,563.31 per ounce by 3:50 pm AEDT (4:50 am GMT), after rebounding from support near the US$4,400 level and briefly testing the US$4,600 mark.
The latest advance has been supported by a moderation in the United States dollar, which paused its recent rally as traders unwound positions and adjusted portfolios ahead of the end of the March quarter.
Improved risk sentiment also contributed to gold’s rebound. Optimism surrounding a potential de-escalation in the Middle East conflict has reduced demand for the dollar as a safe-haven asset, following reports that Donald Trump may be willing to end the U.S. military campaign against Iran even if the Strait of Hormuz remains largely closed.
Additional support for risk appetite came from expectations of stable Chinese economic data, including manufacturing and non-manufacturing PMI readings for March, which helped lift sentiment despite ongoing geopolitical tensions.
Gold prices were further underpinned by comments from Jerome Powell, who indicated that long-term inflation expectations in the United States remain well anchored.
His remarks eased concerns about aggressive monetary tightening, indirectly supporting bullion.
Despite the recent recovery from four-month lows, gold continues to face headwinds. Elevated energy prices have pushed inflation expectations higher, leading markets to scale back expectations for interest rate cuts by the Federal Reserve this year.
