Gold Holds Near $4,065 as US-Iran Negotiation Hopes Persist Ahead of Fed Decision

Gold traded near $4,065 an ounce as hopes for a US-Iran settlement persisted ahead of this week's Federal Reserve interest-rate decision.

Spot gold fell 0.3% to $4,065.32 an ounce as of 8:15 a.m. in Singapore on July 27, according to Bloomberg. It rose 0.6% in the previous session.

President Donald Trump said there was a strong chance that "something could happen" in negotiations with Iran. He added that military conflict could resume if the talks fail to produce an agreement.

The US has halted airstrikes on Iran for three straight days, and Iran has also stopped attacks on countries around the Persian Gulf. Iran and Oman are also negotiating the resumption of shipping through the Strait of Hormuz.

Gold has traded around $4,000 an ounce since late June. Buying has emerged on pullbacks, helping the metal mostly hold above that level. Holdings in gold-backed exchange-traded funds have also risen for five straight trading days, the longest stretch of gains since May.

Focus is now turning to this week's Fed rate decision. US consumer-price growth in June slowed more than expected, while higher energy prices tied to the recent Middle East conflict have fueled inflation concerns, adding to uncertainty over monetary policy.

Interest-rate swaps are pricing in about a 40% chance that the Fed will raise rates by 0.25 percentage point on Wednesday. Citadel Securities expects the central bank to increase rates at this meeting.

Silver fell 0.3% to $58.19 an ounce at the same time. Platinum and palladium also declined, while the Bloomberg Dollar Spot Index rose 0.1%.