Gold prices stayed under pressure early Tuesday, hovering below the US$3,250 mark, as a modest recovery in the United States dollar weighed on the precious metal amid cautious market sentiment.
By 3:40 pm AEST (5:40 am GMT) spot gold prices were trading $18.54 or 0.6% lower at US$3,211.27 per ounce.
The Greenback steadied after recent losses, drawing some support from renewed optimism surrounding U.S. trade negotiations with key partners, including India, South Korea, and Japan.
While this lifted sentiment around the dollar, its upside remains capped following Moody’s decision to downgrade the U.S. sovereign credit rating from Aaa to Aa1.
In Asian trading, gold slipped further into negative territory, trading near multi-week lows. The precious metal faced additional pressure from revived hopes of a potential ceasefire between Russia and Ukraine.
On Monday, U.S. President Donald Trump held talks with Russian President Vladimir Putin and expressed that negotiations with Ukraine would begin “immediately”.
However, the Kremlin suggested that any peace deal would take time, and Trump declined to align with European nations on imposing further sanctions on Moscow.
Trade-related optimism continues to shape currency and commodities markets. In Washington, South Korean and U.S. officials are meeting for a second round of technical talks concerning reciprocal tariffs, a dialogue set to span three days.
Meanwhile, Bloomberg reported that India and the U.S. are in discussions over a three-phase trade agreement, with an interim deal expected before July.
In the absence of major U.S. economic data, investor attention will turn to scheduled speeches by Federal Reserve policymakers.
