Ammon News - Gold prices rose more than 1% on Tuesday as investors weighed ‌diplomatic efforts to ease the U.S.-Iran conflict, which could temper oil-driven inflation risks and influence the U.S. Federal Reserve's interest rate path.

Spot gold rose 1.2% to $4,054.24 per ounce as of ​0529 GMT. U.S. gold futures for August delivery were up 1.1% at $4,059.10.

"It ​looks like gold is trying to find a base somewhere around ⁠this ($4,000) level and is going to try to re-engage the upside from there," ​said Ilya Spivak, head of global macro at Tastylive.

"These headlines from the Middle ​East seem to have some degree of knock-on, though it is increasingly only being paid attention to in a passing kind of way."

Oil prices softened on Tuesday, with markets weighing reports ​of mediation efforts between the U.S. and Iran against an exchange of fresh ​attacks between the two and threats of a naval blockade of Saudi Arabia by Yemen's Houthis.

A senior ‌Iranian ⁠official told Reuters on Monday that Tehran had received a proposal from mediators for a 10-day ceasefire in efforts to salvage the interim deal, intended to pave the way to a lasting agreement to end the war.

The recent escalation in the ​conflict drove oil prices ​to more than ⁠a one-month high on Monday, with a growing chorus of U.S. policymakers arguing interest rates may need to rise to beat back ​persistent inflation.

High interest rates increase the opportunity cost of holding ​non-yielding bullion.

While ⁠the Federal Reserve is widely expected to keep interest rates unchanged at next week's meeting, traders are currently pricing a 64% chance of a rate hike in September, ⁠according ​to the CME FedWatch Tool.

Spot silver gained 2.8% ​to $57.99 per ounce, platinum was up 1% at $1,610.06 and palladium rose 1.2% to $1,267.68.


Reuters