PRECIOUS-Gold steady as Trump's Iran deadline looms
By Ashitha Shivaprasad
April 7 (Reuters) - Gold prices were little changed on Tuesday, as caution prevailed in the market ahead of the expiry of a U.S. ultimatum warning Iran to reopen the Strait of Hormuz or face devastating attacks on its infrastructure.
Spot gold XAU= was up 0.2% at $4,659.35 per ounce by 9:25 a.m. ET (1325 GMT), after rising by 1% earlier in the session. U.S. gold futures GCcv1 steadied at $4,684.50.
"The gold market is treading water ahead of this evening’s U.S.-imposed 8 p.m. Eastern Time deadline. It is on hold as traders wait to see what happens, as the event could be impactful," said Jim Wyckoff, senior analyst at Kitco Metals.
IRAN SHOWS NO SIGNS OF CONCEDING
Strikes on Iran intensified throughout the day, but Iran showed no sign of accepting Trump's ultimatum to open the Strait by the end of Tuesday. The U.S. president said "a whole civilisation will die tonight" unless Tehran reached a last-minute deal.
"Gold traders are more focused on what central banks might do with their interest rates than they are about geopolitics. If major economies hold off on lowering interest rates, that can be extrapolated to mean less demand for gold," Wyckoff said.
Oil prices have surged since the Iran conflict heightened supply concerns. Higher energy costs feed into inflation and limit central banks’ ability to cut interest rates. Although gold is a hedge against inflation, it is less attractive in a high-rate environment because it offers no yield. O/R
The market is also focused on minutes from the Federal Reserve's meeting in March, which will be released on Wednesday. Additionally, U.S. Personal Consumption Expenditures data is due on Thursday, and the Consumer Price Index on Friday.
Elsewhere, China's central bank continued gold purchases for a 17th consecutive month, data showed.
Among other metals, spot silver XAG= dipped 0.8% to $72.22 per ounce, platinum XPT= shed 2.2% to $1,935.93, and palladium XPD= fell 1.7% to $1,459.75.
