PRECIOUS-Gold steady as Trump's Iran deadline keeps markets cautious

By Pablo Sinha

April 7 (Reuters) - Gold prices steadied on Tuesday, as investors remained cautious ahead of a deadline set by U.S. President Donald Trump for reopening the Strait of Hormuz, a key flashpoint in the Iran war.

Spot gold XAU= slipped 0.1% to $4,640.93 per ounce by 0327 GMT, while U.S. gold futures GCcv1 for June delivery fell 0.4% to $4,666.70.

"Everyone is in a mode where we're waiting for whatever the outcome is of this diatribe that the President has been on for the past several days," said Ilya Spivak, head of global macro at Tastylive, a financial derivatives trading platform.

Iran said on Monday it wanted a lasting end to the war with the U.S. and Israel and pushed back against pressure to reopen the Strait of Hormuz, while Trump warned the country could be "taken out" if it did not meet his Tuesday night deadline to reach a deal.

Oil prices extended gains, holding above $110 a barrel as Trump raised his rhetoric against Iran. O/R

The surge in oil prices has fuelled inflation concerns. While gold typically benefits during periods of inflationary pressure, higher interest rates reduce its appeal as a non‑yielding asset.

Cleveland Fed President Beth Hammack and Chicago Fed President Austan Goolsbee both see inflation as a far bigger problem than employment, underscoring their support for maintaining tighter monetary policy.

Markets widely see no chance of a Fed rate cut this year, per CME's FedWatch tool. FEDWATCH

Investors now await the minutes of the Fed's March policy meeting on Wednesday, as well as U.S. inflation indicators, including Personal Consumption Expenditures (PCE) data and the Consumer Price Index (CPI) later this week.

"Last year, gold went off on its own and became its own speculative narrative. We're likely to see that re-emerge this year after whatever sort of risk washes off here... ultimately by the end of the year, we could end up closer to $5,500 and $6,000," Spivak added.

Spot silver XAG= fell 0.9% to $72.17 per ounce, platinum XPT= shed 1.1% to $1,958.75 and palladium XPD= lost 0.5% to $1,478.49.