Gold steadies as US rate-hike expectations weigh

Gold prices struggled to gain momentum on Tuesday as expectations that interest rates will remain elevated for longer weighed on investor sentiment, while traders awaited comments from Federal Reserve officials for clues on the monetary policy outlook.

Spot gold was little changed at $4,344.29 an ounce by 01:51 GMT, while US gold futures were steady at $4,381.80.

Gold is traditionally viewed as a hedge against inflation and geopolitical risks, but its appeal tends to diminish in a high-interest-rate environment as investors favor yield-bearing assets.

Analysts said that with limited US economic data scheduled this week, investors will focus on comments from Federal Reserve officials for indications of whether the central bank is leaning toward another interest rate hike in October, while also monitoring crude oil prices.

Fed signals further rate hikes

The Federal Reserve raised its benchmark interest rate by a quarter percentage point last week and signaled that further increases could follow in the coming months.

St. Louis Federal Reserve President Alberto Musalem said the US central bank will likely need to raise interest rates further to bring down inflation driven by strong demand as well as a commodity price shock that has spread beyond oil, adding that it would be better for the Fed to act sooner rather than wait.

On the geopolitical front, Houthi fighters sought to seize strategic highlands in Yemen in an attempt to cut off the Red Sea coast from the remaining areas controlled by Saudi-backed forces, following a report that US President Donald Trump had called off planned US strikes against the group at the last minute.

Oil prices rose as the market stabilized following several days of declines, while investors monitored developments surrounding potential talks between the United States and Iran during the United Nations General Assembly meetings this week.

Spot silver rose 0.3% to $66.19 an ounce, platinum gained 0.3% to $1,792.76, while palladium advanced 0.3% to $1,305.10.