Gold declines despite easing concerns over inflation, interest rate hikes

• Gold prices may gain support as US-Iran peace talks lower oil costs and dampen rate-hike fears.

• Donald Trump warned military strikes against Iran could resume if diplomatic negotiations collapse.

• Traders expect the Federal Reserve to hold interest rates steady this week, with possible hikes delayed to September.

Gold price (XAU/USD) loses ground after registering gains in the previous day, trading around $4,050 per troy ounce during the Asian hours on Tuesday. The price of the non-yielding yellow metal may regain ground following remarks from US President Donald Trump indicating that the US is engaged in "good talks" with Iran to resolve the Middle East conflict. The prospect of de-escalation sent oil prices lower, easing market concerns over rising inflation and further interest rate hikes.

However, Trump also cautioned that the US remains prepared to resume military strikes if negotiations collapse. The statement comes after the US suspended attacks late Friday following nearly two weeks of hostilities, with Tehran simultaneously halting retaliatory strikes against US bases in neighboring countries.

Meanwhile, traders are turning their attention to the Federal Reserve’s upcoming policy decision this week, where central bank officials are widely expected to keep interest rates on hold. While lingering inflationary pressures have led a minority of traders to speculate on an immediate rate increase, the prevailing consensus suggests that any potential hike would likely be deferred until September.