Spot gold rose 0.3% to $4,321.43 by 9:59 AM, holding near weekly highs after Monday's gains. US gold futures fell 0.2% to $4,343.07.
Gold prices were little changed in Asian trading on Tuesday, as investors awaited further details of the US-Iran peace agreement while also turning their attention to a busy week of central bank meetings, led by the Federal Reserve.
Gold jumped more than 2% on Monday after Washington and Tehran announced a preliminary agreement to end the conflict and resume shipping through the Strait of Hormuz, easing inflation fears and putting pressure on the US dollar. The peace framework agreement, expected to be formally signed later this week, has led to a sharp drop in oil prices and an improvement in risk appetite in global markets.
Brent crude oil fell to three-month lows on Monday, while global stock markets rose on expectations that lower energy costs could ease inflationary pressures.
Investors awaited details on the timing of the agreement, as both countries stated that a permanent truce remains to be discussed.
Market attention now turns to a number of important central bank decisions this week.
The Bank of Japan raised its short-term interest rate by 25 basis points to 1.0%, the highest level in 31 years, an expected move aimed at containing inflation and continuing the gradual normalization of monetary policy.
The Reserve Bank of Australia kept interest rates unchanged at 4.35% after three consecutive hikes. Traders are now awaiting policy announcements from the US Federal Reserve and the Bank of England later this week. Markets will be closely watching comments from Fed Chairman Kevin Warsh for clues about the future direction of US interest rates.
High borrowing costs typically weigh on non-yielding gold, increasing the opportunity cost of owning the metal. Recent US inflation data and lingering concerns about price pressure have led investors to trim their expectations for rate cuts this year.
The USD index rose 0.1% on Tuesday after hitting a 10-day low in the previous session.
Among other precious metals, silver prices fell 0.3% to $69.76 per ounce, while platinum rose 0.2% to $1,776.60 per ounce. Benchmark copper futures on the London Metal Exchange fell 0.6% to $13,677.33 a tonne, while U.S. copper futures fell 0.7% to $6.45 a pound.