Gold prices inched up on Tuesday as escalating tensions in the Middle East drove investors towards the safe-haven metal. Spot gold (XAU/USD) rose 0.2% to $2,026.75 per ounce after earlier hitting a near two-week low.
The gains came as the US continued airstrikes against Iran-backed Houthis in Yemen and hopes rested on a potential Israel-Palestine truce during a visit by US Secretary of State Antony Blinken. With few other supports for gold prices besides Middle East uncertainty, the precious metal remains sensitive to geopolitical tensions.
Meanwhile, a weaker dollar and declining Treasury yields also boosted appeal for non-yielding bullion. Traders are awaiting guidance from several Fed speakers this week after paring back expectations for rate cuts in 2024. Gold is considered a hedge against inflation that could follow easier monetary policy.