Gold rises as US yields, dollar slip; markets watch Israel-Iran truce
Gold prices edged higher on Wednesday, supported by a pullback in the U.S. dollar and Treasury yields, as markets monitored the fragile truce between Israel and Iran.
Spot gold was up 0.1% at $3,328.18 per ounce, as of 0425 GMT, after hitting on Tuesday its lowest level in more than two weeks.
U.S. gold futures rose 0.3% to $3,342.30.
The dollar index hovered near a one-week low, making greenback-priced bullion more attractive for other currency holders. The benchmark 10-year Treasury yields remained near a more than one-month low.
"The technical selling of the dollar and weaker U.S. Treasury yield have benefited gold prices," OANDA senior market analyst Kelvin Wong said.
A potential catalyst for a gold breakout could be further weakness in the dollar, renewed focus on the U.S. fiscal deficit, and tariff policy, especially as Iran-Israel tensions ease, Wong added.
The ceasefire brokered by U.S. President Donald Trump between Iran and Israel appeared to be holding on Wednesday, a day after both countries signalled that their air conflict had ended, at least for now.
U.S. consumer confidence unexpectedly deteriorated in June as households increasingly worried about job availability, another indication that labor market conditions were softening amid rising uncertainty from Trump's tariffs.
Higher tariffs could begin raising inflation this summer, a period that will be key to U.S. Federal Reserve's consideration of possible rate cuts, Fed Chair Jerome Powell told members of Congress on Tuesday.
Fed funds futures traders are now pricing in 60 basis points of rate cuts for 2025, with the first move expected to come in September.
According to a report by the Official Monetary and Financial Institutions Forum, one in three central banks managing a combined $5 trillion plan to increase exposure to gold over the next 1-2 years, the highest in at least five years.
Elsewhere, spot silver was up 0.1% at $35.95 per ounce, platinum fell 0.2% to $1,314.75, while palladium was down 0.4% at $1,062.24.
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