Gold prices edged higher in Asian trading on Tuesday, supported by growing optimism that the United States and Iran could resume peace negotiations, although ongoing tensions in the Strait of Hormuz continued to cap gains.
By 3:45 pm AEST (5:45 am GMT), spot gold was up 0.4% at US$4,761.18 per ounce, holding above the $4,750 level as investors balanced improving risk sentiment against lingering geopolitical uncertainty.
The precious metal extended its recent rebound as hopes for renewed diplomacy between Washington and Tehran boosted market confidence.
Recent remarks from President Donald Trump and Vice President JD Vance have fuelled expectations that another round of talks could take place in the coming days.
According to sources cited by the Associated Press, U.S. and Iranian officials are considering fresh in-person negotiations aimed at ending their six-week conflict before the current ceasefire expires next week.
Discussions remain ongoing, with Islamabad and Geneva reportedly under consideration as potential venues, and talks possibly resuming as early as Thursday.
Trump reinforced the possibility of renewed engagement, stating that “we’ve been called by the other side” and that “they want to work a deal”.
Vance also struck a cautiously optimistic tone, noting that the U.S. made progress during recent talks in Pakistan and emphasising that “the ball is in Iran’s court”.
Despite the improving diplomatic outlook, uncertainty surrounding the Strait of Hormuz continues to pose risks for markets, particularly given its importance to global energy supply chains.
Meanwhile, the U.S. dollar remained under pressure, offering additional support to gold prices. The U.S. dollar index (DXY) hovered near six-week lows around 98.32, as investors reassessed the Federal Reserve’s policy outlook amid the geopolitical backdrop.
Expectations for U.S. monetary policy have become increasingly uncertain, with traders largely sidelining recent inflation data as geopolitical developments dominate sentiment.
As such, the upcoming U.S. producer price index (PPI) report is expected to have a limited impact on market direction.
