Gold futures held firm as safe-haven demand supported trading REUTERS/Lisi Niesner

Gold futures stablised on Tuesday (26 July) on market expectations that the US Federal Reserve would keep headline interest rates on hold, while oil futures continued to slide in the face of lacklustre demand projections and an uptick in Middle Eastern crude production.

At 4:38pm BST, the Comex gold futures contract for December delivery was up 0.5% or $6.25 to $1,321.25 an ounce, while Comex silver was up 0.30% or six cents to $19.71 an ounce. Spot platinum also rose 0.95% or $10.26 to $1,094.50 an ounce.

FXTM research analyst Lukman Otunuga said gold is currently entangled in a fierce tug of war with US rate hike expectations and risk aversion from concerns over the global economy.

"The metal has found some support above $1,308 and is currently searching for a direction as the combination of dollar strength, anxiety ahead of the Fed meeting and lingering Brexit uncertainties keep the metal in limbo.

"Although it is widely expected that US rates will not be increased in July, a hawkish-sounding statement could punish gold further consequently opening a path below $1,308. On the other hand, if concerns over the global economy continue to elevate then the metal may remain buoyed as investors flock to safe-haven safety."

Meanwhile, concerns over the global economy and rising crude production continue to dent confidence in the oil futures market. At 4:58pm BST, the Brent front month futures contract was down 1.7% or 78 cents to $44.61 per barrel, while the West Texas Intermediate was down 0.5% or 22 cents to $42.91 per barrel.

Analysts at Morgan Stanley said headwinds continue to grow for the second half of 2016, reinforcing their bearish bias.

"Oversupply is returning as disruptions resolve, pushing the oil market back into a $30-50 oversupply pricing band. Incremental data points should also be negative from here: supply continues to return from disruptions, refined products are severely oversupplied, crude demand is falling well short of product demand, and key product demand is decellarating," they wrote in a note to clients.

However, the investment bank's analysts added that they see an oil price floor around the mid-$30s given "potential OPEC chatter and investor views on the cycle."