By: Economy Middle East

Gold prices are maintaining a largely steady performance this Tuesday as market participants carefully navigate the implications of a fragile ceasefire between Israel and Iran, while simultaneously balancing concerns regarding persistent inflation and the future trajectory of U.S. interest rates. As of 8:47 UAE time, spot gold experienced a modest decrease of 0.25 percent, reaching $4,328.89 per ounce, which comes after the previous session saw bullion touch its lowest point in more than two months. Meanwhile, U.S. gold futures for August delivery reflected a slight decline of 0.23 percent, settling at $4,353.25.

In the local UAE market, gold rates remain structured across different purity levels for interested buyers. The price for 24-carat gold currently stands at AED 521.50, while 22-carat gold is positioned at AED 482.75. Additionally, 21-carat gold has reached AED 463.00, followed by 18-carat gold at AED 396.75, and 14-carat gold at AED 309.50.

Fragile Middle East truce

The broader market sentiment remains heavily influenced by developments in the Middle East, where both Iran and Israel announced on Monday that they had halted attacks on each other following an appeal from U.S. President Donald Trump. Despite this, Tehran has issued a warning that it would resume hostilities should Israel continue to target Hezbollah in Lebanon.

Simultaneously, U.S. monetary policy remains a central focus for investors. Goldman Sachs has expressed an expectation that the U.S. Federal Reserve will maintain interest rates unchanged through 2026, delaying any potential rate cuts until 2027, due to indications of stronger economic activity and sustained job growth. Reflecting this cautious outlook, traders are currently pricing in a greater than 70 percent probability of a Federal Reserve rate hike by December, according to the CME FedWatch tool. Looking ahead, investors are closely bracing for the release of U.S. Consumer Price Index data for May, scheduled for Wednesday, which is expected to provide critical insight into the Federal Reserve’s future monetary policy path.

Mixed precious metals performance

Performance across the wider precious metals sector was mixed during early Tuesday trading. Spot silver saw a decline of 0.76 percent to reach $4,328.89 per ounce, and platinum lost 0.45 percent to settle at $1,751.25. Conversely, palladium demonstrated growth, rising by 0.42 percent to reach $1,201.00.