Gold recovers from early losses as traders reassess Fed rate outlook

Gold prices recovered from early losses to trade higher on Tuesday as investors reassessed the US Federal Reserve's interest rate outlook against a backdrop of persistent geopolitical tensions and volatile crude oil prices.

On the Multi Commodity Exchange (MCX), gold futures for August delivery rose Rs 196, or 0.14 per cent, to Rs 1,42,598 per 10 grams after opening in negative territory.

Market analysts said the precious metal initially came under pressure before recovering as investors weighed the implications of inflation trends, oil price movements and the US central bank's future monetary policy.

In international markets, Comex gold futures for August delivery edged up to USD 4,044.80 an ounce in New York.

According to analysts, gold briefly fell below the USD 4,000-an-ounce mark — its lowest level in nearly eight months — before rebounding to around USD 4,040 during overseas trading.

The recovery came despite lingering uncertainty in West Asia. While the US and Iran have paused hostilities ahead of another round of peace negotiations in Doha, concerns remain after Iran reiterated its intention to retain control over shipping through the Strait of Hormuz, a vital route for global oil supplies.

Market participants are also closely tracking the US Federal Reserve's policy outlook. Investors are factoring in the possibility of three interest rate increases this year, with the upcoming US jobs report expected to provide further guidance on the central bank's next moves and the near-term direction of precious metals.

With PTI inputs