Gold returns above $4,000 as hopes grow for easing US-Iran tensions

Gold (XAU/USD) rose to about $4,010 in the early Asian session on Tuesday, ending a two-day losing streak. FXStreet attributed the move to cheaper oil, which tempered inflation concerns before the Fed's policy decision.

According to investingLive, gold had slipped below $4,000 on Friday for the first time since July before holding above that level at the start of the week. Oil retreated after President Trump refrained from striking Iran over the weekend, with WTI crude down 2.6% at $100.75.

Another report linked the rebound to a weaker US dollar, which lifted gold from a three-month low, with the FOMC meeting in focus. Several other major central banks are also due to decide on policy this week.

The drivers pull in opposite directions. Lower geopolitical risk can reduce safe-haven demand for gold, while falling energy prices ease inflation pressure and fears of Fed rate hikes, which tends to support a non-yielding asset. InvestingLive noted that $4,000 is being tested as support and raised the possibility of a deeper correction.