Gold Holds Near $4,360 as US-Iran Talks, Lower Oil Temper Rate Concerns

International gold prices were little changed near $4,360 an ounce as traders watched for progress in U.S.-Iran talks and weighed whether lower oil prices could ease pressure on future Federal Reserve rate decisions.

According to Bloomberg, spot gold traded at $4,363.50 an ounce as of 7:55 a.m. in Singapore on September 22, up 0.1% from the previous session. Gold swung between gains and losses a day earlier before ending 0.4% higher.

Expectations for easing tensions in the Middle East rose after President Donald Trump gave an upbeat assessment of talks with Iran. Trump said in New York that U.S. and Iranian officials had held very good talks, contrasting with his earlier comments that included strong military threats against Iran.

Oil prices also extended their decline. The move followed Trump's remarks and reports that Saudi Arabia plans to soon resume crude exports through its East-West pipeline. Once the pipeline returns to normal operations, crude can be shipped without passing through the Strait of Hormuz. West Texas Intermediate crude has fallen more than 10% from last Tuesday's close.

Oil prices and the U.S. rate outlook have recently been key variables for the gold market. Higher energy prices can stoke inflation and increase the chances of additional Fed rate hikes. Because gold does not pay interest, higher rates typically make the metal less attractive to investors.

The Fed raised its benchmark interest rate last week for the first time in three years. Tom Barkin, president of the Federal Reserve Bank of Richmond, said a day earlier that it could take considerable time for the shocks that drove inflation to fade and that there was a risk elevated price pressures could become entrenched. He did not spell out a specific view on the need for further rate hikes.

Meanwhile, China's gold imports have reached a record level this year. Helped by lower global gold prices and a stronger yuan, the country's gold imports exceeded 1,000 metric tons from January through August. That was above the total for all of last year and the highest level since the data series began in 2017.

At the same time, spot silver rose 0.5% from the previous session to $67.40 an ounce. Silver extended its gains after climbing 1.6% a day earlier, while platinum and palladium also edged higher. The Bloomberg Dollar Spot Index was little changed after rising for three straight sessions.