FX.co ★ Gold Steadies on Mideast, Fed Uncertainties

Gold held steady near $4,050 an ounce on Tuesday, trading in a tight range as investors monitored US-Iran developments for signals on a potential reopening of the Strait of Hormuz, while also reassessing the US Federal Reserve’s policy outlook. President Donald Trump described his offer of talks as Tehran’s final chance to strike a deal and voiced confidence that Hormuz would reopen soon. Iran, however, denied that any direct negotiations with the US were taking place, though it acknowledged that discussions with Oman aimed at boosting shipping activity through the strait are progressing.

In parallel, markets are assigning roughly a 65% probability to a 25 basis point Fed rate increase in September, following the central bank’s decision to leave interest rates unchanged in July. New York Fed President John Williams said current monetary policy remains appropriately positioned and reiterated that inflation is expected to moderate in the second half of the year.