Gold Prices Rebound from One-Month Low Amid Persistent Middle East Tensions

Gold Prices Rise Amid Middle East Tensions and Economic Concerns

Gold prices surged on Tuesday, rebounding from a more than one-month low reached in the previous session, as investors reassessed the fragile Middle East truce and its potential impact on inflation and interest-rate expectations.

Spot gold prices rose 0.8% to $4,557.56 per ounce at 1:31 p.m. EDT (1731 GMT), after touching its lowest level since March 31 on Monday. U.S. gold futures also settled 0.8% higher at $4,568.50.

Market analysts point to bargain hunting and easing oil prices as factors supporting gold prices. However, the market is expected to remain focused on economic data, with the release of the U.S. employment report later this week serving as a key test of the economy's resilience.

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The Middle East conflict has been driving oil prices higher, with the narrow Strait of Hormuz, which carries a large share of global oil, fertilizer, and other commodity supplies, having been virtually closed since February 28. Elevated energy prices risk stoking inflation and delaying central banks' easing cycles.

While gold is traditionally seen as a hedge against inflation and uncertainty, its appeal tends to wane when interest rates are high, as rising yields make non-yielding assets less attractive. However, safe-haven demand remains, even if its influence has weakened as gold is increasingly treated as a risk-sensitive asset.

The Middle East conflict, which saw the United Arab Emirates come under attack from Iranian missiles and drones, has heightened concerns about inflation and interest-rate expectations. The fragile truce, which was intact despite an exchange of fire the previous day, has driven up prices around the world.

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