(Updates prices.)
Gold rose midafternoon Tuesday but fell back from early highs as the dollar rose.
Gold for July delivery was last seen up US$14.50 to US$4,520.80 per ounce, after earlier touching US$4,571.30.
The rise comes as Reuters on Tuesday, citing Iranian media, reported Iran is considering a fresh U.S. proposal to end the war and reopen the critical Strait of Hormuz, while U.S. President Trump said on Monday talks were continuing. This is a day after the two sides traded strikes and Iran was said it would not continue talks as long as Israel continued to attack its Hezbollah allies in Lebanon.
Hope for an end to the war is lowering oil prices and easing fears over the rise in inflation that has followed the closure of the Strait since the war began on Feb. 28, blocking the exports from Persian Gulf nations that supplied a fifth of daily oil demand. Traders have turned away from gold as a store of value amid the inflation worries, preferring the dollar as a hedge should central banks raise interest rates to slow rising prices.
"Gold continues to take its cues from the oil market given crude's influence on inflation expectations and, by extension, interest rates, bond yields and the dollar," Saxo Bank noted.
The dollar was higher, with the ICE dollar index last seen up 0.06 points to 99.26. Treasury yields rose, with the U.S. two-year note last seen paying 4.053%, up 1.8 basis points, while the yield on the 10-year note was up 0.5 points to 4.458%.