Gold edges higher as Middle East tensions support prices

Gold edges up on Middle East tensions, weaker dollar.

Berto Tordecilla

Berto Tordecilla

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.

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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.

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