By: Economy Middle east

Gold prices eased on Tuesday as investors watched the impact of the Middle East conflict and stalled U.S.-Iran peace talks on the interest rate outlook for major central banks meeting this week.

Spot gold fell 0.3 percent to $4,665.86 per ounce as of 9:04 UAE time, while U.S. gold futures for June delivery declined 0.36 percent to $4,676.76.

In the UAE, gold rates were stable across all carats, with 24-carat at AED565.75, 22-carat at AED524.00, 21-carat at AED502.25, 18-carat at AED430.50 and 14-carat at AED335.75.

The dollar edged higher and oil prices hovered above $109 a barrel as the Strait of Hormuz remained largely shut. Moreover, higher crude prices can fuel inflation by raising transportation and production costs, which increases the likelihood of higher interest rates.

While gold is often seen as an inflation hedge, higher rates make yield-bearing assets more attractive and can weigh on bullion’s appeal.

The U.S. Federal Reserve is widely expected to keep interest rates steady at the end of its two-day meeting on Wednesday. Investors are also watching decisions this week from the European Central Bank, the Bank of England and the Bank of Canada.

Among other precious metals, silver fell 1.2 percent to $74.61 per ounce, platinum was unchanged at $1,984.19, and palladium declined 0.9 percent to $1,463.