April 6 (Reuters) - Gold prices were nearly steady on Monday, as market participants stayed cautious and awaited further signals on the evolving U.S.-Iran situation and its impact on global interest rates.
Spot gold was little changed at $4,669.13 per ounce by 9:26 a.m. ET (1326 GMT) after falling 1% earlier in the session. U.S. gold futures rose 0.3% to $4,694.20 per ounce.
On the eve of a U.S. deadline, the United States and Iran were weighing the framework of a plan to end their five‑week-old conflict, even as Tehran pushed back against pressure to swiftly reopen the Strait of Hormuz. President Donald Trump has threatened to rain "hell" on Tehran if it did not make a deal by the end of Tuesday.
"Focus is likely to remain on the war and interest rates. If the conflict drags on, oil will grind higher amid tightening supply conditions, adding to inflationary pressures," said Bart Melek, global head of commodity strategy at TD Securities.
"That leaves central banks, particularly the Federal Reserve, with less room to ease policy and could even revive discussions about higher rates if energy prices rise further, which is negative for gold."
Oil prices fell in choppy trading on Monday, though they have risen sharply since the conflict began.
Gold is widely regarded as a hedge against geopolitical risks and inflation, but because it yields no interest, it tends to be less attractive when interest rates are high.
Other items on investors’ radar include minutes of the Fed’s March policy meeting due on Wednesday, U.S. Personal Consumption Expenditures (PCE) data due on Thursday, and the Consumer Price Index (CPI) on Friday.
The U.S. central bank held rates steady last month and a majority of traders now see no chance of the Fed cutting interest rates this year, according to CME’s FedWatch tool.
Among other metals, spot silver fell 0.4% to $72.67 per ounce, platinum lost 1% to $1,969.81, and palladium was down 1% at $1,488.58.
Reporting by Ashitha Shivaprasad in Bengaluru; Editing by Joe Bavier
