Gold prices edged higher on Tuesday, supported by a weaker U.S. dollar, but remained on track for their worst monthly performance in more than 17 years as surging energy prices dampened expectations of interest rate cuts.
Spot gold rose 0.8 percent to $4,544.19 per ounce in early trading, while U.S. futures for April delivery gained 0.3 percent to $4,573.20.
The decline in the dollar made gold more affordable for holders of other currencies, offering limited support to prices.
However, the precious metal has fallen about 14 percent since the start of the month, marking its steepest drop since the global financial crisis in 2008. Despite the downturn, gold remains up approximately 5 percent for the current quarter.
Market sentiment has shifted sharply, with traders largely ruling out any rate cuts by the Federal Reserve this year. Rising oil prices, driven by escalating tensions in the Middle East, have heightened inflation concerns and reduced the likelihood of monetary easing.
Before the conflict, markets had anticipated at least two rate cuts in 2026. However, policymakers are now expected to remain cautious as energy costs continue to climb, reports Al-Rai daily.
Jerome Powell said the central bank would assess the economic impact of the conflict, noting that officials typically look beyond short-term shocks such as oil price spikes.
Oil benchmarks extended gains, posting their strongest monthly increase on record amid fears of supply disruptions linked to the war in the region.
Meanwhile, Donald Trump renewed warnings that Washington could target Iran’s energy infrastructure if tensions escalate further, particularly if the Strait of Hormuz remains closed.
In other precious metals, silver, platinum and palladium recorded modest gains in spot trading, reflecting mixed investor sentiment across the commodities market.
