Gold Holds Steady as Markets Eye US Jobs Data, Iran Tensions

Gold prices stabilised on Tuesday, recovering from a sharp selloff in the previous session, as traders balanced escalating Middle East tensions with anticipation of crucial US labour market data due this week.

Spot gold was steady at $4,454.68 per ounce, having touched its lowest level since August 19 on Monday. US gold futures for December delivery edged up 0.5% to $4,503.70.

The focus this week is on a series of US economic indicators, including job openings, the ADP employment report, and the more comprehensive nonfarm payrolls data. These figures are expected to provide clarity on the health of the labour market and the trajectory of interest rates.

Market pricing currently suggests a 65% probability of a US rate hike in September, according to the CME FedWatch Tool. The precious metal fell more than 3% on Friday after Federal Reserve Chair Kevin Warsh indicated that the central bank would need to act if it lacked confidence that inflation was moving towards its 2% target.

While gold is traditionally viewed as a hedge against inflation, higher interest rates typically diminish its appeal by increasing the attractiveness of yield-bearing assets. President Donald Trump, speaking in the Oval Office, expressed respect for Warsh, stating that the Fed Chair would "do what he has to do" regarding rates.

Meanwhile, geopolitical risk remains elevated. President Trump threatened further strikes against Iran on Monday following the first direct exchange of attacks in a month, raising concerns about a conflict that had recently shifted towards an economic standoff.

Among other precious metals, spot silver gained 0.4% to $66.77 per ounce, platinum rose 0.7% to $1,802.67, and palladium firmed 0.8% to $1,367.25.