Gold holds steady, silver falls

Gold bars

Gold prices were unchanged on Tuesday as investors remained cautious ahead of the Federal Reserve’s interest rate decision, after a temporary US-Iran understanding helped ease concerns over energy shocks and inflation.

Gold was supported by a sharp decline in oil prices following the announcement of the US-Iran understanding, which includes an extension of the ceasefire and the reopening of the Strait of Hormuz, boosting expectations that inflationary pressures could ease in the coming period.

However, investors’ risk aversion ahead of the Fed meeting, which began today and concludes tomorrow, limited gains in the precious metal, despite widespread expectations that interest rates will remain unchanged.

Meanwhile, market bets on a US rate hike in December fell to 60% from 68% a week earlier, according to the CME FedWatch Tool.