Gold prices showed a steady trend on Tuesday as investors approached the market with caution, evaluating the economic effects of the ongoing conflict in the Middle East while awaiting important central bank policy decisions set for this week. Spot gold rose by 0.1% to $5,007.61 per ounce as of 0110. Gold futures in the U.S. for April delivery rose by 0.2%, hitting a price of $5,011.70. The dollar saw a modest rise, leading to increased expenses for bullion priced in dollars for those holding other currencies. Oil stayed high above $100 a barrel as the ongoing U.S.-Israeli conflict with Iran led to major restrictions in the Strait of Hormuz, representing the most significant disruption to global supply chains ever recorded.

U.S. President Donald Trump emphasized his request for countries to help in unblocking the crucial Strait, expressing disappointment that none were willing to offer assistance. Israel announced it has comprehensive strategies for at least three more weeks of conflict as its military targeted locations across Iran overnight, while Iranian drone strikes briefly disrupted operations at Dubai airport and affected a major oil facility in the United Arab Emirates. The rise in oil prices, along with the possibility of higher inflation, has caused markets to lower their predictions for global central bank easing this year.

Higher crude prices contribute to inflation by raising transportation and production costs. Gold has historically been seen as a protection against inflation; however, increasing interest rates make yield-generating assets more appealing, which in turn diminishes the demand for the metal. The U.S. Federal Reserve is expected to keep its interest rates unchanged for the second meeting in a row when it issues its policy statement on Wednesday.

Central banks in Britain, the euro zone, Japan, Australia, Canada, Switzerland, and Sweden are set to meet this week for their first gatherings since the beginning of the Iran war. Spot silver decreased by 0.2%, closing at $80.58 per ounce. Spot platinum fell by 0.7% to $2,097.75, and palladium saw a decrease of 0.2% to $1,595.32.