Gold prices closed higher on Tuesday, recovering from previous losses as softer-than-expected US inflation data tempered expectations for further monetary tightening by the Federal Reserve.
The precious metal's rebound came despite persistent geopolitical tensions involving Iran, which had previously weighed on market sentiment.
The US Consumer Price Index (CPI) data released earlier in the session came in below forecasts, signaling a cooling in price pressures.
This development has led investors to scale back bets on additional interest rate hikes, providing a tailwind for non-yielding assets like gold.
The market reaction underscores the delicate balance between macroeconomic data and geopolitical risk premiums.
While geopolitical uncertainties in the Middle East continue to provide a floor for safe-haven demand, the immediate driver of Tuesday's move was the shift in the interest rate outlook.