Gold Holds $4,000 as US-Iran Strikes Test Ceasefire

Gold slipped toward $4,000 an ounce after the US and Iran traded attacks in the Persian Gulf over the weekend, straining a ceasefire that had pushed energy prices back to pre-war levels.

Spot gold fell as much as 0.9% before recovering to trade down 0.6% at $4,064.47 by 8:53 a.m. Singapore time. The move followed a 1.6% gain on Friday. Oil advanced after a tanker carrying Qatari crude was hit during the tit-for-tat assaults, which hampered shipping through the Strait of Hormuz.

The two sides have since agreed to halt the attacks and meet Tuesday in Doha, Axios reported, citing unidentified US officials.

Gold holding above $4,000 despite renewed tension in the strait "suggests marginal dip buyers have returned and are willing to defend this level," said Justin Lin, an analyst at Global X ETFs Australia.

The latest Middle East flare-up follows US inflation data that, while high, came within analyst estimates. Treasury yields dipped after the personal consumption expenditures price index, the Fed's favored inflation gauge, rose 0.4% in May from the prior month.

Gold is down about 23% since the US and Israel launched strikes on Iran in late February. Higher energy prices fueled inflation and raised expectations central banks would keep rates higher for longer, a negative for non-yielding bullion.

"I expect gold to become increasingly resilient to Middle East volatility, especially now that it has completely erased year-to-date gains and fast money investors have likely largely moved on," Lin said.

Silver fell 1.1% to $58.50. Platinum and palladium also retreated. The Bloomberg Dollar Spot Index was marginally higher.