Gold prices remained steady on Tuesday, as investors approached the market with caution due to a deadline set by U.S. President Donald Trump concerning the reopening of the Strait of Hormuz, a key area in the Iran conflict. Spot gold held steady at $4,646.69 per ounce as of 0100, while U.S. gold futures for June delivery saw a decrease of 0.2%, closing at $4,674.40.Iran expressed on Monday its wish for a lasting solution to its issues with the U.S. and Israel, while upholding its position regarding the Strait of Hormuz. This is in light of Trump’s caution that the nation may encounter serious repercussions if a deal is not reached by Tuesday night.
The U.N. Security Council is expected to vote later today on a resolution aimed at protecting commercial shipping in the Strait of Hormuz. Nonetheless, the proposal has been significantly weakened due to resistance from China, a permanent member with veto authority, concerning the approval of military action. Oil prices continued to rise, staying above $110 a barrel as Trump ramped up his rhetoric towards Iran.
Meanwhile, White House economic adviser Kevin Hassett told on Monday he believed a “supply shock” in the U.S. economy, driven by capital spending and productivity gains from artificial intelligence, would allow the Federal Reserve to lower interest rates. In contrast, Cleveland Fed President Beth Hammack and Chicago Fed President Austan Goolsbee view inflation as a much more pressing issue than employment, emphasizing their support for a continued strict monetary policy. Markets largely expect that there will be no chance of a Fed rate cut this year, based on CME’s FedWatch tool.
Investors are looking forward to the release of the minutes from the Fed’s March policy meeting on Wednesday. At the same time, U.S. inflation metrics, including the Personal Consumption Expenditures data on Thursday and the Consumer Price Index on Friday, are expected to offer further insights. Spot silver fell by 0.9% to $72.11 per ounce, while platinum dropped by 0.2% to $1,974.66, and palladium saw a decline of 0.6% to $1,476.27.