By: Economy Middle East

Gold prices edged higher on Tuesday as investors assessed mixed signals surrounding potential U.S.-Iran negotiations and awaited a series of U.S. labor market reports for clues on the Federal Reserve’s future interest rate path.

As of 5:35 GMT, spot gold gained 0.16 percent to $4,061.82 per ounce, while U.S. gold futures advanced 0.65 percent to $4,117.25.

In the UAE, gold rates edged higher, with 24-carat gold rising AED4.25 to AED489.75 and 22-carat gold gaining AED4 to AED453.5.

In addition, 21-carat gold rose AED3.75 to AED434.75 and 18-carat gold ticked up AED3.25 to AED372.75.

Meanwhile, 14-carat gold rose AED2.5 to AED290.75.

Energy-driven inflation concerns persist

Gold prices rose as investors balanced ongoing geopolitical risks with expectations that elevated energy prices could keep U.S. interest rates higher for longer.

Brent crude jumped more than 20 percent in July after renewed fighting between the United States and Iran, alongside attacks on commercial vessels near Oman, raised concerns over potential disruptions to regional oil supplies. The rise in energy prices has fueled worries about a resurgence in inflation, reinforcing expectations that the Federal Reserve may maintain a restrictive monetary policy stance.

Geopolitical uncertainty persisted after Iran said on Monday that no talks with the United States were currently taking place and that no meetings were scheduled, contradicting U.S. President Donald Trump’s remarks that diplomatic discussions were close.

Meanwhile, the U.S. dollar index held steady at the 100 level, offering limited direction for gold prices.

Investors eye key U.S. labor market reports

U.S. labor market data due this week includes job openings figures later on Tuesday, the ADP employment report on Wednesday and the nonfarm payrolls report on Friday, with investors watching the releases for signals on the Fed’s monetary policy outlook.

Markets are currently pricing in a 65 percent probability of a rate hike in September after a divided Federal Reserve left rates unchanged at its latest meeting. A reduction in expectations for a September hike would likely provide further support for gold prices.

Meanwhile, New York Fed President John Williams said he remained confident that inflation would continue to ease gradually but warned that the central bank would act with rate increases if price pressures fail to moderate.

Meanwhile, Citi said it expects gold prices to remain largely range-bound or decline over the coming month before resuming their rally toward $4,500 in the fourth quarter and $5,000 in the first half of next year.

Other precious metals

As gold prices rose, the broader precious metals market saw positive movement on Tuesday. Spot silver climbed 1.2 percent to $58.89 per ounce, while platinum rose 0.9 percent to $1,641.96 and palladium advanced 0.9 percent to $1,275.83.