Gold slips on firm dollar ahead of tentative US-Iran talks

Gold prices fell as the dollar firmed, investors remaining cautious as they looked to tentative U.S.-Iran talks and a Senate confirmation hearing for Federal Reserve Chairman nominee Kevin Warsh later on Tuesday. Spot gold was down 0.9% to $4,776.49 per ounce at 9:33 a.m. EDT (1333 GMT). U.S. gold futures for June delivery fell 0.7% to $4,795.40. The U.S. dollar edged higher, making greenback-priced bullion more expensive for other currency holders. "Markets are hesitant about a potential deal between the U.S. and Iran, given the weekend's developments and mixed rhetoric. This is keeping bulls in check for now and may confine gold to a tight range until certainty arrives," said Zain Vawda, analyst at MarketPulse by OANDA. Gold could trade between $4,750 and $4,850, with any move above this hinging on Middle East announcements, he added. In an interview with CNBC, U.S. President Donald Trump sent mixed signals on talks due to resume in Islamabad. A senior Iranian official said Tehran was considering attending, even as the country's foreign ministry condemned a U.S. attack on the Iranian commercial vessel Touska over the weekend. Oil prices fell on expectations that peace talks will lead to more supply flowing from the key Gulf producing region, even though Trump, who said he remained optimistic for a deal with Iran, stated he did not want to extend a ceasefire due to expire within hours. Inflation fears have risen with oil prices, which have surged since the U.S. and Israel launched the war on Iran on February 28. Although gold is seen as an inflation hedge, demand for the non-yielding asset suffers when interest rates are high. Former Fed Governor Warsh takes the next step to becoming head of the U.S. central bank, with a Senate Banking Committee hearing due to begin at 10 a.m. EDT (1400 GMT). "Investors fear higher rates, but a confirmed 'team player' could boost gold. However, the reaction could be muted as the situation is vastly different now than it was prior to the war," Vawda added. Among other precious metals, spot silver fell 1.6% to $78.64 per ounce, platinum lost 0.8% to $2,073.05, while palladium was up 1% at $1,566.75.