Gold prices steadied on Tuesday after falling nearly 2% earlier in the ‌session, as investors assessed conflicting signals on a potential de-escalation in the U.S.-Israeli war on Iran and the ​implications for inflation and interest rates.

Spot gold was flat at $4,407 per ounce as of 1224 GMT, after falling ​to $4,097.99 per ​ounce in the previous session, its lowest since November 24.

U.S. gold futures for April delivery were steady at $4,406.40.

SOME STABILITY FOR NOW

"The market is in a wait-and-see ⁠position. Considering that oil prices are a bit lower, this is reducing these rate hike expectations somehow and that's giving some stability to the gold price now," said UBS analyst Giovanni Staunovo.

International Brent crude prices plunged 13% on Monday after Trump held off on attacks ​against Iran's power plants, ‌but traded moderately ⁠higher on Tuesday ⁠as Iran denied it had talks with the United States to end the war. The Israeli military ​also said Iran launched waves of missiles at the country.

The rise ‌in energy prices due to supply disruptions and damage to ⁠energy infrastructure in the Middle East has fueled inflation concerns and strengthened prospects of higher interest rates globally. While gold is considered an inflation hedge, high interest rates reduce the non-yielding asset's appeal.

San Francisco Federal Reserve Bank President Mary Daly said on Monday that unless the Iran conflict is resolved quickly and the Fed can "look through" a temporary increase in oil prices, it is unclear what the central bank's next move on interest rates will need to be.

However, analysts say there are broader factors that should still support ‌gold prices this year. The metal has fallen around 18% since ⁠the war began.

"Structural drivers for the gold rally over ​the recent years, debt issues, political pressure on the Fed to cut rates, high inflation, low interest rates, and a weaker dollar, these factors are still there. Nothing has changed on that ​side," Staunovo added.

Elsewhere, spot ‌silver rose 0.2% to $69.30 per ounce. Spot platinum added 1.5% to $1,908.71 ⁠and palladium fell 2.1% to $1,403.25.

(Reporting by Ishaan ​Arora in Bengaluru; Editing by Mrigank Dhaniwala, Barbara Lewis and Diti Pujara)