Gold remained under pressure on Tuesday, holding below $4,800 per ounce as investors weighed the prospects of a second round of United States-Iran peace talks in Pakistan against an uncertain monetary policy outlook ahead of a critical Federal Reserve confirmation hearing in Washington.
Spot gold was down 0.7 percent at $4,785.99 per ounce as of 0745 GMT, extending its decline from Monday when it hit its lowest level since April 13. United States gold futures for June delivery fell 0.5 percent to $4,805. A firmer dollar added to the pressure, making greenback-denominated commodities more expensive for holders of other currencies.
The metal remains under pressure as investors cautiously awaited a second round of negotiations before the two-week ceasefire expires this week. Vice President JD Vance is expected to lead the US delegation in Pakistan, while Iran is also reportedly preparing to send representatives, reversing earlier signals that it would not join further negotiations. President Donald Trump has said he is unlikely to extend the existing truce if no agreement is reached before its expiration, adding that the Strait of Hormuz will remain closed until a deal is secured.
“If those things happen, gold will probably be well supported because oil prices will drop,” said Kyle Rodda, senior financial market analyst at Capital.com. “If those things don’t come about, you might start to see some of that volatility come back into the market.”
The Middle East conflict has triggered a historic energy supply shock that heightened inflationary risks and raised the likelihood of central bank rate hikes, weighing on gold. The precious metal remains down more than 8 percent since the Iran war began.
Adding a separate layer of market uncertainty, Kevin Warsh, President Trump’s nominee to replace Jerome Powell as chair of the Federal Reserve, faces a Senate Banking Committee confirmation hearing on Tuesday. Warsh is widely expected to be confirmed to succeed Powell, whose term expires on May 15, though one potential obstacle remains in Senator Thom Tillis, a Republican who has said he will not advance the nomination until the Department of Justice concludes an investigation into Powell.
In prepared remarks to be delivered at the hearing, Warsh pledged that the Federal Reserve must stay focused on its primary mandate, stating that Fed independence is placed at greatest risk when the central bank strays into areas beyond its authority. He expressed firm commitment to fighting inflation while signalling support for keeping political independence intact.
Among other metals, spot silver fell 1.1 percent to $79.06 per ounce, platinum lost 0.6 percent to $2,076.35, while palladium edged up 0.6 percent to $1,560.19.
Major institutional forecasts remain constructive over the medium term, with JPMorgan and Deutsche Bank projecting year-end 2026 gold targets of $6,300 and $6,000 per ounce respectively, characterising the current pullback as a short-term dislocation driven by geopolitical volatility rather than a structural shift in demand.
