Gold steadied on Tuesday but hovered at a more than ‌seven-week low on concerns that the Federal Reserve may keep interest rates higher for longer, while investors awaited a slew of US economic data.

Spot gold was little changed at $4,124.57 per ounce, as ​of 0140 GMT, after hitting its lowest level since August 5 in ​the previous session. US gold futures fell 0.3% to $4,156.70.

Geopolitical developments will "remain crucial ⁠for gold, as continued tensions could keep energy prices and yields elevated, while ​meaningful progress towards de-escalation could ease pressure," said Christopher Tahir, senior market strategist at ​Exness.

US and Iranian officials spoke separately with mediators as part of a renewed effort to end seven months of war, according to officials of both countries.

Oil prices rose for a second successive session amid lingering concerns over Middle East supply disruptions.

Elevated oil prices can fuel inflation ​by increasing costs across the economy, potentially prompting central banks to raise interest rates to keep ‌price ⁠pressures in check. Despite its reputation as an inflation hedge, gold tends to struggle in a high-rate environment as investors favour assets that generate returns.

Markets currently see a 70.3% probability of a Fed rate hike in October, according to the CME's FedWatch Tool.

Fed Governor Lisa Cook ​said she expects continued ​inflationary pressure in ⁠the coming months stemming from AI-related demand and higher oil prices, though she stopped short of saying more rate hikes will be ​needed.

Investors are watching a series of US economic data due this week, including job openings, ADP employment, PCE figures, and nonfarm payrolls, for fresh signals on monetary policy.

"Persistent price pressures combined with resilient activity would reinforce expectations that central banks need ⁠to ​remain restrictive, keeping yields elevated and leaving gold ​vulnerable to further losses," Tahir added.

Among other metals, spot silver fell 0.6% to $60.62, platinum slipped 1% to $1,699.86, and palladium lost 0.5% to $1,209.08.