Gold loses over 1% as dollar firms, Fed cut hopes fade

Gold prices fell more than 1% on Tuesday, extending their slide to ‌a tenth straight session, pressured by a firm U.S. dollar and fading hopes for near-term Federal Reserve interest rate cuts.

Spot gold fell 1.6% to $4,335.18 per ounce, as of 0227 GMT. The metal fell ​to its lowest level since November 24 on Monday. U.S. gold futures for ​April delivery fell 1.6% to $4,336.10.

The dollar strengthened, making greenback-priced bullion more expensive ⁠for holders of other currencies.

Prices are down "as markets continued to drive up interest rates, ​reasoning that the war in Iran will drive inflation. That global central banks will ​turn more hawkish as a result has been pushing gold lower," said Ilya Spivak, head of global macro at Tastylive.

Spot gold prices have fallen about 18% since the U.S.-Israeli war on Iran started ​on February 28, with the dollar emerging as one of the clearest safe-haven winners.

On ​Monday, Iran denied any negotiations with the United States after President Donald Trump postponed a threat to ‌bomb ⁠Iran's power grid, citing what he described as productive talks with unnamed Iranian officials.

A Pakistani official and a second source told Reuters that direct talks to end the conflict could take place in Islamabad as early as this week.

Oil prices held above $100 a ​barrel after Tehran denied ​it had discussed ending ⁠the Middle East war with Washington.

Higher crude prices tend to fuel inflation by pushing up transport and manufacturing costs. Although rising inflation ​typically boosts gold's appeal as a hedge, high interest rates ​weigh on ⁠demand for the non-yielding asset.

Meanwhile, investors trimmed bets on a December Fed rate hike to roughly 13%, from just above 25% in the prior session, according to CME Group's FedWatch. 

For gold, the ⁠immediate support ​levels are at $4,275 and $4,000, while the resistance is ​seen at $4,650 and $4,840, said Spivak.

Spot silver lost 2.9% to $67.11 per ounce. Spot platinum fell 2.1% to $1,842.30 and palladium ​shed 2.1% at $1,403.76.