Gold prices moved higher on Tuesday as traders weighed geopolitical tensions in the Middle East alongside an intense week for global central banks.
By 09:37 ET (13:37 GMT), spot gold had increased 0.3% to $5,018.44 per ounce. Gold futures were trading up 0.5% at $5,024.61/oz. The metal has largely traded inside a $5,000 to $5,200 per ounce band over the last three weeks, taking mixed signals from the unfolding conflict involving Iran.
Investors traditionally turn to gold when geopolitical risk rises. That dynamic has been at play amid strikes and counterstrikes linked to the U.S.-Israel military actions against Iran. However, the same conflict has placed upward pressure on commodity prices, which has in turn strengthened the U.S. dollar and complicated the outlook for bullion.
Analysts at ING highlighted a partial improvement in risk sentiment this week, driven in part by tentative hopes for the potential unblocking of oil flows through the Strait of Hormuz. ING noted that these developments contributed to "a soft start to the week" for the dollar. A tracker of the currency against a basket of its peers reached its highest level since 2025 on Friday, underlining recent firmness in the greenback.
On Tuesday the dollar eased slightly even as oil prices stayed elevated. The oil market has been kept on edge after U.S. allies largely rebuffed Washington's requests for assistance in reopening the Strait of Hormuz - a strategic waterway south of Iran through which roughly one-fifth of global oil shipments transit. Attacks on crude production sites in the Gulf have continued, and Israel said it had killed one of Iran's highest-ranking leaders.
Iran has warned it would target any vessel carrying goods that benefit the U.S. or its allies if those ships attempted to cross the strait. That threat prompted many container shipping companies to suspend sailings, contributing to a surge in oil and gas prices since the start of the joint U.S.-Israeli strikes on Iran in late February.
The jump in energy costs has raised concerns about renewed inflationary pressure. Some market observers have suggested this may prompt central banks to reconsider their policy paths, possibly resuming rate hikes. The mechanism described by commentators is that higher interest rates could attract additional foreign capital, strengthening the dollar and reducing dollar-priced gold's appeal to international buyers.
This week features a dense schedule of rate decisions. The U.S. Federal Reserve meets on Wednesday and is widely expected to leave interest rates unchanged amid uncertainty over how the Iran conflict will affect inflation. The Bank of Canada will also convene on Wednesday. On Thursday, the Bank of Japan, the Swiss National Bank, the Bank of England and the European Central Bank are due to announce their policy choices.
With bullion hovering within the recent range, market participants are closely watching oil prices, shipping disruptions through the Strait of Hormuz, and the outcomes and guidance from multiple central banks for directional cues on both inflation and currency trends.
Note: This article reports market movements and central bank schedules based on available information; it does not include speculation beyond those reported developments.