Gold gained on Tuesday as traders monitored the latest developments in the Middle East after U.S. President Donald Trump said talks with Iran were ongoing.
U.S. gold futures gained 0.3% to settle at $4,519.90.
Gold market trajectory "depends on the direction of oil prices, bond yields, and the U.S. dollar - all of that, in turn, is tied to the Middle East situation," said Fawad Razaqzada, market analyst at Forex.com.
"For me to turn bullish on gold again, we need to see at least some renewed upside momentum suggesting that buyers are coming back. At the moment, however, the market seems directionless, with participants largely waiting for cues, particularly from the Middle East."
On the geopolitical front, Iran is reviewing a proposed agreement with the United States to halt the war between the two countries, Iran's Mehr news reported, after Trump said talks to reach a deal were continuing.
Since the start of the conflict, gold has come under pressure as a surge in energy prices has stoked inflation worries and expectations of elevated interest rates.
Although gold is typically viewed as a hedge against inflation, it tends to lose its attractiveness as a non-yielding asset when interest rates are high.
Data due this week include the ADP employment report on Wednesday, and Friday's employment report. Markets will scan the data for cues on the Federal Reserve's policy path.
Commerzbank expects gold at $4,800 per troy ounce by the end of this year, down from its previous forecast of $5,000. It maintained its forecast of $5,200 per for the end of 2027 and noted that structural factors supporting gold remain entirely intact.
"In addition to the lowered gold price forecast, weaker industrial demand for silver also points to a slightly lower silver price," Commerzbank added.