Gold prices rise on Tuesday

Gold prices rose on Tuesday, supported by hopes of de-escalation in the Middle East conflict, but remained on track for their steepest monthly decline in more than 17 years as higher energy prices dampened expectations of a US interest rate cut.

Spot gold gained 1.1 per cent to $4,561.68 per ounce by 0427 GMT, while US gold futures for April delivery rose 0.7 per cent to $4,590. The dollar eased, making gold more affordable for holders of other currencies.

Prices found support after Donald Trump signalled willingness to end the US military campaign against Iran, triggering a risk-on sentiment across financial markets, according to market analysts.

Despite the rebound, gold has fallen more than 13 per cent in March, marking its sharpest monthly drop since October 2008, pressured by a stronger dollar and fading expectations of US monetary easing. Traders have largely priced out the possibility of a Federal Reserve rate cut this year as rising energy prices fuel inflation concerns.

Gold, typically supported by lower interest rates as a non-yielding asset, had previously benefited from expectations of two rate cuts before the Middle East conflict escalated. Prices, however, remain about 5 per cent higher for the quarter.

Among other precious metals, silver rose 2.9 per cent to $72.04 per ounce, platinum gained 0.6 per cent to $1,911.15, and palladium advanced 2 per cent to $1,434.23.

Attribution: Reuters