April 21 (Reuters) – Gold prices eased on Tuesday as investors waited to see whether the U.S. and Iran would consider attending peace talks after renewed tensions over the weekend, while a marginally firmer dollar added to the pressure.
Spot gold was down 0.5% at $4,795.51 per ounce, as of 0418 GMT, extending its fall from Monday when it hit its lowest level since April 13. U.S. gold futures for June delivery fell 0.3% to $4,814.
The U.S. dollar edged up on Tuesday, making greenback-denominated commodities more expensive for holders of other currencies. [USD/]
Iran is considering attending peace talks with the United States in Pakistan, a senior Iranian official told Reuters on Monday, following moves by Islamabad to end a U.S. blockade of Iran’s ports, a significant obstacle to Tehran rejoining peace efforts as the end of a two-week ceasefire approaches.
Investors are awaiting “the next headline regarding whether the talks are going to go ahead in Islamabad and then if they do, whether the ceasefire is extended or even better, a peace deal is reached,” said Kyle Rodda, senior financial market analyst at Capital.com.
“If those things happen, gold will probably be well supported because oil prices will drop. If those things don’t come about, you might start to see some of that volatility come back into the market,” Rodda said.
Oil prices fell as investors reassessed supply risks on expectations that the peace talks will take place this week and allow more supply to flow from the key Middle East producing region. [O/R]
Higher crude prices can stoke inflation by raising transportation and production costs. While gold is considered an inflation hedge, high interest rates make yield-bearing assets more attractive, weighing on its appeal.
Gold prices have fallen about 8% since the U.S. and Israel launched strikes on Iran in late February.
Among other metals, spot silver fell 1.2% to $78.93 per ounce, platinum lost 0.7% to $2,074.06, while palladium was up 0.2% at $1,553.97.
(Reporting by Noel John in Bengaluru; Editing by Subhranshu Sahu and Sonia Cheema)
By Noel John
