Gold prices remained under pressure on Tuesday, trading below $4,800 an ounce to settle at $4,786.83 per troy ounce, as markets balanced fragile diplomacy in the Middle East against rising fears of a renewed energy shock.
The move lower reflects less a collapse in sentiment and more a pause in conviction. Investors are holding back ahead of a second round of US–Iran negotiations, with Washington expected to send a delegation led by Vice President JD Vance to Pakistan, while Iranian representatives are also preparing to engage after earlier uncertainty over participation.
At the centre of the market’s hesitation is the Strait of Hormuz. US President Donald Trump has warned that he is unlikely to extend the current ceasefire if no agreement is reached before its expiry, adding that the strategic waterway could remain closed until a deal is secured. For global markets, that risk matters less as political signalling and more as physical supply disruption—given the strait’s role in global energy flows.
That threat is already feeding through into broader macro expectations. Energy supply concerns are intensifying inflation risks at a time when central banks remain sensitive to price persistence. Higher inflation expectations tend to reinforce higher interest rate outlooks, and that dynamic continues to weigh on gold, which does not offer yield and becomes less attractive when rates remain elevated.
On the day, gold eased 0.71%, extending its short-term softness. Yet the broader picture remains firmly positive: prices are up 8.59% over the past month and have surged 43.47% year-on-year, according to CFD data tracking the benchmark market.
This contrast, strong long-term performance versus short-term hesitation, captures the current market tension. Gold is simultaneously being supported by geopolitical uncertainty and constrained by macroeconomic tightening pressures.
For now, traders are watching two timelines unfold in parallel: the diplomatic clock ticking toward the ceasefire deadline, and the macro clock of inflation and interest rates adjusting to potential energy shocks.
