Gold prices edged lower early Tuesday as the dollar and yields continued to climb on rising concerns higher interest rates are coming as oil prices rise due to the war on Iran.
Gold for June delivery was last seen down $19.90 to US$4,538.10 per ounce.
The price of the precious metal has remained rangebound for the past two months after the United States and Israel launched their war on Iran. Iran's blockade of the Strait of Hormuz has shut in exports of a fifth of daily oil supply, raising oil prices by more than half and hiking inflation. Traders have turned away from gold towards the dollar as treasury yields climb on expectations central banks will hike interest rates to slow rising prices.
"Gold continues to hold above support around US$4,500, with the next key downside level being the 200-day moving average, last seen near US$4,355. Traders remain focused on the Middle East crisis and the inflationary impact of sustained higher energy prices, which are pushing global inflation higher while forcing central banks to shift their focus toward potential rate hikes," Saxo Bank wrote.
The dollar rose early, with the ICE dollar index last seen up 0.14 points to 99.34. Treasury yields surged, with the U.S. two year note last seen paying 4.114%, up 5.5 basis points to the highest since February 2025, while the yield on the 10-year note was up 7.2 points to 4.665%.