Gold edged higher as a slump in oil prices over the past few sessions reduced the chance of further interest-rate hikes by the Federal Reserve to contain inflation. Bullion was trading around $4,360 an ounce, reversing course after falling the most in a week the day before. Oil steadied on Tuesday after losing more than 9% over the previous four days on easing concern around Middle East exports and a renewed bout of diplomacy to end the US-Iran war. President Donald Trump is set to address the United Nations General Assembly in New York later Tuesday and has indicated that he's open to meeting his Iranian counterpart, Masoud Pezeshkian, on the sidelines of the gathering.

The decline in oil prices has reduced inflationary concerns, a tailwind for gold that typically benefits when rates are lower. Traders are also tracking comments by Fed officials for clues on the path for rates after the unanimous vote last week to hike for the first time in three years. Chicago Fed President Austan Goolsbee said Monday the US central bank cannot ignore repeated and persistent supply shocks. St. Louis Fed President Alberto Musalem said additional rate rises may be needed to achieve the central bank's inflation goal.

Gold is "holding extremely strong" following the rate-hike with hawkish outlook, with falling energy prices offering support, Ryan Mc Kay, an analyst at TD Securities, wrote in a note. Confidence in the long-term outlook has prompted dip-buying, with around 50 tons of inflows into bullion-backed exchange-traded funds so far in September. Investors are also eyeing this week's summit between Trump and Chinese President Xi Jinping. US Treasury Secretary Scott Bessent described weekend meetings with China's top trade negotiator Li Chenggang as "very successful." Spot gold rose 0.4% to $4,361.89 an ounce at 8:23 a.m. in Singapore.