New Delhi

Gold prices climbed nearly 1 per cent to Rs 1.60 lakh per 10 grams in futures trade on Tuesday amid renewed geopolitical uncertainty surrounding the US-Iran conflict.

On the Multi Commodity Exchange, the yellow metal contract for August climbed by Rs 1,313, or 0.82 per cent, to Rs 1,60,554 per 10 grams in a business turnover of 8,150 lots.

Analysts said precious metals prices gained as investors reassessed geopolitical risks after fresh military developments in West Asia which complicated efforts to secure a lasting peace agreement between the US and Iran.

"Market sentiment had improved on hopes of an imminent US-Iran peace agreement, turned cautious after another round of military escalation over the weekend," Manav Modi, Commodities Analyst, Motilal Oswal Financial Services Ltd, said.

According to reports, Iran's Tasnim News Agency said Tehran had suspended indirect negotiations with Washington and was considering a blockade of the Strait of Hormuz, citing violations of the existing ceasefire arrangement.

However, US President Donald Trump rejected reports of a breakdown in talks and said discussions with Iran were continuing rapidly and that an Israeli strike on Beirut had been called off following his intervention.

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In the global markets, Comex gold futures for August contract gained USD 63.79, or 1.42 per cent, to USD 4,570.09 per ounce in New York.

Market participants are now awaiting the Reserve Bank of India's (RBI) monetary policy decision and key US labour market data this week for further cues on interest rates and near-term direction for bullion prices, Manav Modi said.