Spot gold prices dip as hopes for Iran peace deal fade

Gold prices were under pressure on Tuesday as fading hopes for an Iran peace deal pushed oil prices higher, adding to concerns about inflation and the prospect of higher global interest rates, reports Reuters.

Spot gold fell 1% to $4,685.99 per ounce by 1320 GMT. US gold futures lost 0.7% to $4,693.90.

"Higher oil prices are raising the risk that the U.S. Central bank and others might have to increase interest rates to fight what would surely emerge as stagflation. So gold is responding to that," said Bart Melek, global head of commodity strategy at TD Securities.

Oil prices rose over 3% as hopes for a peace deal on Iran faded after US President Donald Trump said a ceasefire with Iran was "on life support" as Tehran rejected a US proposal to end the conflict.

Joni Teves, precious metals strategist at UBS Investment Bank, said they are maintaining a bullish outlook on gold as underlying drivers remain intact.