Washington: Gold prices moved higher on Tuesday as a weaker United States dollar and easing concerns about inflation encouraged investors to buy the safe haven metal. Market sentiment also improved after signs that tensions in the Middle East could ease.
Spot gold rose to around 5,170 dollars per ounce, gaining nearly one percent during trading. United States gold futures also increased and were trading slightly above 5,170 dollars per ounce.
The rise in gold prices came as the United States dollar weakened against other major currencies. A weaker dollar makes gold cheaper for buyers using other currencies, which often increases global demand for the metal.
Investors were also reacting to falling oil prices, which helped reduce fears of rising inflation. Oil prices dropped sharply after comments suggesting that the conflict involving the United States, Israel and Iran could move toward de escalation.
United States President Donald J. Trump said the war could end soon, which helped calm financial markets. Lower energy prices can reduce inflation pressure, and this often supports gold because investors expect interest rates to remain stable.
At the same time, uncertainty remains in global markets. Iran has warned that it could block tanker traffic in the Strait of Hormuz, a key shipping route that carries nearly one fifth of the world’s oil supply. Any disruption there could again push energy prices higher and increase market volatility.
Other precious metals showed mixed movement in trading. Silver prices rose to about 88 dollars per ounce, while platinum and palladium slipped slightly.
Investors are now waiting for important economic data from the United States later this week, including the consumer price index and the personal consumption expenditures index. These reports are closely watched because they influence decisions by the Federal Reserve on future interest rate policies.
Analysts say gold may continue to remain volatile in the coming days as markets react to geopolitical developments and key economic indicators.