Gold slipped back below $4,400 an ounce on Tuesday, erasing earlier gains in a broad metals-market retreat as investors took profits after a strong rally. The sector also came under pressure from rising oil prices, which kept inflation risks and interest rate concerns in focus.
The pullback followed a setback in diplomatic efforts between the United States and Iran, after President Donald Trump said he was not interested in extending the interim peace agreement. At the same time, gold continued to draw support from waning expectations of a Federal Reserve rate hike, after a series of weaker-than-expected US economic reports.
Markets now anticipate that the Fed will leave policy unchanged in September and no longer fully price in a rate increase by year-end, in contrast to expectations just a week earlier. Bullion also remained underpinned by firm investment demand and ongoing central bank purchases, particularly from China.
