Gold prices edged lower during Asian trading on Tuesday, slipping below the US$4,300 per ounce level as traders locked in profits, while optimism around Ukraine peace talks reduced demand for safe-haven assets.
By around 3 pm AEDT, spot gold was trading below the US$4,300 per ounce mark, extending modest losses from the previous session.
Progress in discussions aimed at ending the war in Ukraine weighed on gold, which typically benefits during periods of heightened uncertainty.
Meanwhile, the U.S. Federal Reserve delivered its third interest rate cut of the year last week and signalled that further rate reductions could follow in 2026, even as policymakers projected only one cut next year and stressed that the outlook remains highly uncertain.
Lower interest rates tend to reduce the opportunity cost of holding non-yielding assets such as gold, providing underlying support for prices.
However, continued optimism around a potential peace deal in Ukraine could cap near-term gains by dampening safe-haven demand.
Market attention is now turning to a backlog of U.S. economic data releases, which were delayed by the recent U.S. government shutdown and are due later on Tuesday.
The U.S. nonfarm payrolls report is expected to take centre stage, with investors looking for fresh signals on the direction of US monetary policy.
If the data point to a further slowdown in the U.S. labour market, expectations of additional Fed rate cuts could strengthen, offering support to gold prices.
In addition to payrolls, traders will also be closely watching U.S. retail sales and purchasing managers index data for further insight into the health of the U.S. economy.
