By: Economy Middle east

Gold prices eased on Tuesday as the U.S. dollar strengthened, while investors waited to see whether the United States and Iran would meet this week for peace talks after renewed tensions over the weekend.

Spot gold fell 0.35 percent to $4,792.87 per ounce as of 8:48 a.m. UAE time, extending its decline after touching its lowest level since April 13 on Monday. U.S. gold futures for June delivery fell 0.43 percent to $4,808.11.

In the UAE, local gold rates also declined, with 24-carat gold dropping AED1.75 to AED580.50 and 22-carat easing AED1.50 to AED537.50. 21-carat gold slipped AED1.50 to AED515.50, 18-carat fell AED1.25 to AED441.75, and 14-carat gold declined AED0.75 to AED344.75.

Strong dollar pressures gold prices

The stronger dollar made dollar-denominated commodities more expensive for holders of other currencies. Oil prices also fell as investors reassessed supply risks on expectations that peace talks between the U.S. and Iran may take place this week, potentially allowing more supply to flow from the Middle East.

Higher crude prices feed into inflation by increasing transportation and production costs. Gold is often seen as an inflation hedge, but higher interest rates make yield-bearing assets more attractive, which can weigh on bullion demand.

Iran is considering whether to attend peace talks in Pakistan, a senior Iranian official told Reuters on Monday, after Islamabad moved to help end the U.S. blockade of Iran’s ports. The current two-week ceasefire is set to expire this week, and Tehran said the ongoing violations of the ceasefire remain a barrier to further negotiations.

Gold has fallen about 8 percent since the U.S. and Israel launched strikes on Iran in late February.

Among other metals, spot silver fell 1.31 percent to $78.86 per ounce, platinum lost 0.72 percent to $2,081.90, while palladium rose 0.71 percent to $1,534.00.