- Gold hit a four-month low on Monday
- Iran denies talks with US
- Brent oil remains above $100 a barrel
March 24 (Reuters) - Gold prices pared some losses after dropping more than 2% earlier on Tuesday, as investors remained wary about the Middle East conflict amid conflicting signals over Iran-U.S. talks.
Spot gold was down 0.2% to $4,396.74 per ounce, after falling to $4,097.99 per ounce, the lowest since November 24.
U.S. gold futures for April delivery slipped 1.5% to $4,340.90.
Iran has denied any negotiations with the U.S. after President Donald Trump postponed a threat to bomb Iran's power grid, citing what he described as productive talks with unnamed Iranian officials. Tehran launched multiple waves of missiles at Israel on Tuesday, the Israeli military said.
"It's all pertaining (to) the event that is unfolding in this U.S.-Israel-Iran conflict. Key stakeholders are not showing uniform messaging across the board over here....so what we see is that markets are in a flux right now," said Kelvin Wong, a senior market analyst at OANDA.
Benchmark Brent held above $100 a barrel. Higher crude prices tend to fuel inflation by pushing up transport and manufacturing costs.
Although rising inflation typically boosts gold's appeal as a hedge, high interest rates weigh on demand for the non-yielding asset.
Spot gold prices have fallen about 18% since the U.S.-Israeli war on Iran started on February 28.
"Liquidity needs could keep gold under pressure for four to six weeks, based on historical trends. Price risks tend to rise if oil shocks give way to inflation fears or rising debt or recession risks," analysts at Standard Chartered said in a note.
"For now, however, markets are torn between inflation shocks and negative output growth, and the risk of rate hikes." FEDWATCH
Elsewhere, spot silver lost 3.4% to $66.80 per ounce. Spot platinum fell 2.1% to $1,841.68 and palladium shed 2.7% to $1,395.25.
Reporting by Noel John, Pablo Sinha and Swati Verma in Bengaluru; Editing by Sumana Nandy, Rashmi Aich, Harikrishnan Nair and Mrigank Dhaniwala
Source: Reuters