Gold prices remained stable on Tuesday, as investors assessed the economic implications of rising tensions in the Middle East, coupled with the halt of peace negotiations between the U.S. and Iran. Spot gold increased by 0.2% to $4,528.99 per ounce, as of 0059. Bullion dropped more than 2%, reaching its lowest point since March 31 during the last session. Gold futures in the U.S. for June delivery increased by 0.1% to $4,538.20. On Monday, the U.S. and Iran initiated fresh assaults in the Gulf, vying for dominance over the Strait of Hormuz through maritime blockades, which jeopardized a delicate ceasefire.

On Monday, the U.S. military reported the destruction of six Iranian small boats, along with the interception of Iranian cruise missiles and drones, as Tehran aimed to react to a new U.S. naval initiative intended to assist shipping through the Strait of Hormuz. U.S. crude declined by over 1% as the market assessed the implications of Iranian assaults on vessels in the Strait of Hormuz, coupled with reports that a U.S.-flagged ship managed by Maersk had navigated the strait under the protection of U.S. military forces.

On Monday, John Williams, President of the New York Federal Reserve, expressed that U.S. monetary policy is in a strong position to handle the considerable economic uncertainty arising from the conflict in the Middle East. He also noted that after the current inflation spike eases, the central bank might shift its attention towards lowering rates. On Monday, U.S. President Donald Trump expressed his worries on social media regarding high interest rates, reiterating his call for a reduction in the base rate that he has been promoting for several months.

SPDR Gold Trust, recognized as the largest gold-backed exchange-traded fund globally, reported that its holdings held firm at 1,040.66 metric tons as of Friday. Spot silver climbed 0.1% to $72.76 per ounce, platinum advanced 0.5% to $1,954.80, and palladium experienced a rise of 0.8% to $1,491.84.