Gold markets traded with little net movement in Asian hours on Tuesday as participants awaited clarification on a preliminary U.S.-Iran peace framework and turned their attention to a packed calendar of central bank decisions.
Spot gold rose 0.1% to $4,313.35 by 21:54 ET (01:54 GMT), keeping close to levels reached earlier in the week after a rally on Monday. In contrast, U.S. gold futures slipped 0.4% to $4,333.90.
The earlier surge in bullion, a gain of more than 2% on Monday, followed the announcement by Washington and Tehran of a preliminary accord to end their conflict and reopen the Strait of Hormuz. That development alleviated some inflation concerns and put downward pressure on the U.S. dollar, supporting the metal's safe-haven appeal.
The peace framework is expected to be formally signed later in the week, a step that coincided with a marked drop in oil prices and an improvement in risk appetite across global markets. Brent crude fell to three-month lows on Monday, and global equity markets rallied on the prospect that lower energy costs could reduce inflationary pressures.
Markets are now closely watching the timetable for putting the accord into effect. Both the United States and Iran have noted that a permanent truce has not yet been negotiated, leaving the implementation timeline uncertain.
Attention is also turning to a sequence of major central bank meetings this week. The Bank of Japan is meeting on Tuesday, and policy announcements from the U.S. Federal Reserve and the Bank of England are due later in the week. The BOJ is widely expected to lift interest rates to a 31-year high, while investors currently anticipate the Fed will hold rates steady at its June 16-17 meeting.
Traders will be watching remarks from Fed Chair Kevin Warsh for guidance on the likely path of U.S. interest rates. Higher borrowing costs generally weigh on non-yielding assets such as gold by raising the opportunity cost of holding the metal. Recent U.S. inflation readings and ongoing worries about price pressures have prompted investors to pare back expectations for rate cuts this year.
Among other precious metals, silver eased 0.8% to $69.41 per ounce, while platinum declined 1% to $1,755.60 per ounce.
Market participants remain in a wait-and-see mode: the evolving situation around the Iran agreement and the outcomes of central bank meetings are set to determine near-term direction for commodities, currencies and risk assets.