Gold prices maintained their upward momentum Tuesday after reports emerged that the US and Iran are making headway on negotiations to reopen the Strait of Hormuz. The precious metal held gains as investors reacted to signs that the critical waterway could soon resume normal operations, potentially restoring disrupted oil shipments and easing supply concerns that have pressured markets.

The Strait of Hormuz serves as a vital conduit for global oil trade, with roughly one-third of the world's seaborne oil passing through its narrow channel. Any disruption to this flow typically sends shockwaves through energy markets, driving crude prices higher and stoking inflation worries. Progress toward reopening the strait suggests oil flows could normalize, reducing the supply crunch that has kept energy prices elevated.

Easing supply concerns directly impact inflation expectations, which in turn affects gold's appeal as an inflation hedge. When investors anticipate stable oil supplies and contained inflation, pressure on gold prices typically eases. Gold has been tracking these geopolitical developments closely, with traders positioning for the next phase of negotiations between the two nations.