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Gold rose more than 1% on Tuesday,
buoyed by lower US Treasury yields, while weaker oil prices
eased fears of higher inflation and elevated interest rates.
Spot gold rose 1% to $4,525.72 per ounce by 0900 GMT.
US gold futures for August delivery gained 1.1% to
$4,556.
Oil prices fell after US President Donald Trump said talks
with Iran were ongoing. Lower fuel prices ease inflation worries
and reduce bets for higher interest rates.
While gold is traditionally seen as a hedge against
inflation, it loses its appeal in a high-interest-rate
environment as a non-yielding asset.
“Gold continues to take its cues from the oil market given
crude’s influence on inflation expectations and, by extension,
interest rates, bond yields and the dollar,” Saxo Bank analyst
Ole Hansen said.
“The metal remains in a short-term downtrend, with a break
above $4,630 needed to signal a more constructive outlook and
potentially attract fresh momentum buying.”
The yield on the benchmark 10-year US Treasury note
fell 1.1%, reducing the opportunity cost of holding
non-yielding bullion.
Further supporting gold prices, Lebanon announced a partial
ceasefire between Hezbollah and Israel on Monday in what would
amount to a limited de-escalation of a conflict that has killed
thousands of people and inflamed the broader U.S.-Israeli war
with Iran.
Investors now await the U.S. nonfarm payrolls report for
May, which is due on Friday, to assess resilience in the labour
market amid mounting concerns about inflation due to the Middle
East conflict.
A host of Federal Reserve board members are also set to
speak this week, including Cleveland Fed President Beth Hammack,
San Francisco Fed President Mary Daly and Fed Governor Michael
Barr.
“We remain positive over the long-term as economic growth
risks, worsening geopolitical relations, currency volatility and
downside risks to equity markets will continue to support gold’s
role as a portfolio diversifier,” ANZ said in a note.
Among other metals, spot silver rose 2% to $76.32 per
ounce, platinum gained 2% to $1,961.90 and palladium
rose 1.2% to $1,378.25.
Published on June 2, 2026
