PRECIOUS-Gold holds steady as investors focus on Middle East developments
By Ashitha Shivaprasad
March 24 (Reuters) - Gold held steady on Tuesday after touching a four-month low in the previous session, as markets assessed developments in the Middle East and their implications for inflation and interest rates.
Spot gold XAU= was little changed at $4,408.77 per ounce by 11:00 a.m. ET (1500 GMT), after hitting its lowest of $4,097.99 since November on Monday.
U.S. gold futures GCcv1 for April delivery steadied at $4,409.30.
"If the war continues and energy prices keep grinding higher, it's not great news for gold," said Bart Melek, global head of commodity strategy at TD Securities.
"Gold is going to be under pressure for the second quarter, but I think by year-end, the gold outlook should again look pretty sweet, as we are hoping that by then central banks like the Fed will have more freedom and we could see the dollar ease and rates drop," he added. USD/ US/
Bullion, considered a safe‑haven and an inflation hedge, loses appeal in a high‑rate environment as it yields no interest.
Pakistan's prime minister said on Tuesday he was willing to host talks between the United States and Iran to help end the war, a day after U.S. President Donald Trump postponed threats to strike Iranian power plants following what he called "productive" talks.
The war has effectively halted shipments of about a fifth of global oil and liquefied natural gas through the Strait of Hormuz, pushing up energy prices and stoking inflation fears. Major central banks also emphasised their readiness to act if the war drives a broader surge in prices. O/R
"The recent price slump is likely to be just as much of an overreaction as the massive rise at the start of the year. In a sense, the pendulum has swung from one extreme to the other for gold," analysts at Commerzbank said in a note.
Spot gold is down about 21% from its January 29 peak of $5,594.82, and has lost more than 16% since the U.S.-Israeli war on Iran began on February 28.
Among other metals, spot silver XAG= rose 1.1% to $69.86, platinum XPT= gained 0.7% to $1,894.60 while palladium XPD= lost 1.3% to $1,414.75.
