Gold prices marginally higher as uncertainty reigns over state of U.S.-Iran talks

Gold prices ticked up slightly on Tuesday, but gains were limited by increasing uncertainty over the state and extent of peace talks between the U.S. and Iran amid mixed messaging from both parties.

Tehran for a second straight day said that exchange of messages with Washington were halted, but President Donald Trump and Secretary of State Marco Rubio asserted that negotiations were still ongoing. U.S. equities and the dollar were also rangebound amid the conflicting signals, while oil prices rose.

At 15:33 ET (19:33 GMT), spot gold was a smidge higher at $4,486.23/oz, while gold futures gained 0.2% to $4,516.62/oz.

Mixed messaging from U.S. and Iran 

Tensions between Washington and Tehran have flared up in recent weeks amid exchanges of fire in the Gulf and an Israeli military operation in Lebanon, threatening a fragile ceasefire between the warring parties that has been in place since the beginning of April.

Israel’s moves in Lebanon have become a sticking point in negotiations between the U.S. and Iran, with Iran’s semi-official Tasnim News Agency on Monday saying it had learned that Tehran’s negotiating team was suspending mediated "dialogues and exchange of texts" with Washington.

Reuters reported that Lebanon had announced a partial ceasefire between Iran-backed Hezbollah militants and Israel, although Israel’s military said it had intercepted two projectiles fired from Lebanon on Tuesday. Trump on Monday stressed that Hezbollah had promised, through mediators, not to attack Israel. Meanwhile, Israeli Prime Minister Benjamin Netanyahu had pledged to pull back from assaulting Beirut, Trump claimed.

Meanwhile, uncertainty continued to grow over the true state and extent of peace talks. Iran’s Fars News Agency on Tuesday reported that there was currently no exchange of messages with the U.S., citing an informed source. The agency said the exchange had been stopped for at least a few days in order to reach a preliminary memorandum of understanding between Washington and Tehran, citing the source.

"Fake News Reports that the Islamic Republic of Iran, and the U.S.A., stopped speaking a few days ago are false and erroneous. The conversations between us have been going on continuously, including four days ago, three days ago, two days ago, one day ago, and today," Trump later said on Truth Social.

"We are in talks," Secretary of State Rubio said on Tuesday in a hearing before the Senate Foreign Relations Committee.

"There is the prospect before us - which could happen today, it could happen tomorrow, it could happen next week - that, for the first time, certainly in my memory, they have agreed to negotiate aspects of their nuclear program that just a month ago, just a year ago, they were refusing to even mention, much less enter into discussions about," Rubio said.

Iran’s nuclear ambitions is also a key sticking point in negotiations with the U.S., with Trump repeatedly saying that the country cannot have a nuclear weapon.

Gold replaces U.S. Treasuries as top asset in foreign reserves 

Away from the Middle East, a report from the European Central Bank (ECB) on Tuesday said gold had now become the top asset in total official foreign reserves - comprising both foreign exchange and gold holdings - at the end of 2025.

Gold accounted for 27% of official reserves at the end of last year based on prices at that time, compared to 15% for the euro and 22% for U.S. Treasury bonds. This is the first time gold has been a bigger holding than Treasuries in over three decades. 

"This development largely reflects valuation effects. In nominal terms, the gold price surged by around 60% and 30% in 2025 and 2024 respectively, which mechanically increases the share of gold in total official foreign reserves," the ECB said.

"Going forward, gold faces limitations as an official reserve asset compared with the major fiat currencies: its price is volatile, it is not remunerated and, when held in physical form, it is costly to store. More importantly, the supply of gold is not fully elastic and does not adjust seamlessly to shifts in international demand for liquidity," the central bank added.