Ammon News - Gold prices edged higher on Tuesday, extending gains for a fourth ‌straight session, as a preliminary U.S.-Iran peace agreement eased rate hike concerns, while investors awaited further details on the deal.

Spot gold was up 0.4% at $4,322.99 per ounce, as of 0431 GMT, after rising as much ​as 3.6% on Monday to hit its highest level since June 5.

U.S. gold futures ​for August delivery were down 0.2% at $4,343.50.

U.S. President Donald Trump said on ⁠Monday a preliminary agreement to end the war in the Persian Gulf has been signed by the U.S. ​and Iran, though details have yet to be made public and both countries said a ​permanent truce is yet to be negotiated.

"We have had a good run in gold prices ever since late Thursday on the Iran news. I think this euphoria rally might last for another few days culminating ​in Friday's signing ceremony," said Edward Meir, an analyst at Marex.

The U.S. dollar held near ​10-day lows ahead of the Bank of Japan's interest rate decision.

Investors are also watching out for the Federal ‌Reserve ⁠policy decision and remarks, the first under Chair Kevin Warsh, on Wednesday, with rates widely expected to remain unchanged.

"Markets are expecting no rate decreases this year. If Warsh signals that at least one cut could be on the table later this year, the dollar should decrease further ​and we could see ​another rally in gold," ⁠Meir said.

"However, if he comes across as more hawkish on rates, gold could come under some pressure."

Traders have scaled back expectations for a ​U.S. rate hike in December to 57% after the peace deal, ​down from ⁠about 70% last week, according to the CME FedWatch tool. FEDWATCH
Gold loses appeal in a high-interest-rate environment as it is a non-yielding asset.

Meanwhile, the Bank of Japan raised interest rates to a 31-year high, ⁠its first ​hike since December, aligning it with other central banks ​shifting towards tighter policy to combat inflation.

Spot silver fell 0.4% to $69.76 per ounce, platinum lost 0.3% to $1,761.95, and palladium ​was down 1.2% to $1,331.86.


Reuters