Gold falls with Middle East war in focus after Trump pauses strike

Gold prices fell on Tuesday, but stayed above ‌a 1-1/2-month low hit in the last session, as markets consolidated while awaiting further developments after U.S. President Donald Trump paused a planned attack against Iran.

Spot gold fell 0.5% to $4,543.49 ​per ounce by 0540 GMT, but above $4,479.54, the lowest level since March ​30 hit on Monday. U.S. gold futures for June delivery lost 0.2% ⁠to $4,546.90.

Gold prices fell 2.4% on Friday in their biggest one-day fall since March ​26 and extended losses on Monday as mounting inflation fears triggered a rout in ​the global bond market. Bullion recovered to close Monday slightly higher.

"It seems like an oscillation in this kind of inflation fear trade and a sort of digestion of the fireworks from ​Friday," said Ilya Spivak, head of global macro at Tastylive, adding that ​markets are now awaiting broad sentiment markers such as the minutes of April's FOMC meeting to ‌be ⁠released on Wednesday.

Bonds steadied following a steep selloff after Trump said on Monday he had paused a planned attack against Iran to allow for negotiations to take place on a deal to end the U.S.-Israeli war, after Iran sent a new ​peace proposal to ​Washington.

Oil prices fell ⁠more than 2%, easing some inflation fears. Gold is considered a hedge against inflation, though higher interest rates tend to ​weigh on the non-yielding metal.

Kevin Warsh will be sworn in as ​Fed chief ⁠on Friday by Trump, a White House official said on Monday, putting the financier at the helm of the central bank as it grapples with intensifying inflation ⁠that may ​make it hard to push through the interest-rate ​cuts Trump desires.

Spot silver fell 2% to $76.09 per ounce, platinum lost 0.7% to $1,965.40, and palladium dropped ​1.5% to $11,397.50.