Gold rose 1 per cent on Tuesday, as inflation fears receded after oil fell following US President Donald Trump's remarks that the Middle East war could "end soon", while a weaker US dollar and easing Treasury yields also provided support, reports Reuters.
Spot gold rose 0.8 per cent to $5,178.60 per ounce, as of 1133 GMT, after gaining over 1 per cent earlier in the session. US gold futures for April delivery rose 1.7 per cent to $5,188.60.
"The recovery in the stock markets also ended up providing respite for gold because of less margin requirements elsewhere, while a lower US dollar and easing Treasury yields are definitely positive for gold markets (today) as well," said Ricardo Evangelista, ActivTrades analyst.
Stocks rallied, and oil prices plunged by more than 7 per cent after Trump's remarks, easing concerns about prolonged disruptions to global oil supplies.
In response to Trump, Iran's Islamic Revolutionary Guards Corps said they would "determine the end of the war", and Tehran would not allow "one litre of oil" to be exported from the region if US and Israeli attacks continued.
The war has effectively shut the Strait of Hormuz, which handles one-fifth of the world's oil supply, stranding tankers for over a week and forcing producers to halt output as storage fills up, sending energy prices soaring.
The dollar fell 0.6 per cent to a one-week low, making greenback-priced bullion cheaper for holders of other currencies, while the benchmark 10-year US Treasury yields also eased, reducing the cost of holding bullion.
Meanwhile, investors expect the US Federal Reserve to keep rates steady at the end of its two-day meeting on March 18, and also see the first rate cut of the year coming in July, per CME Group's FedWatch tool.
Markets are now awaiting the US consumer price index for February, due on Wednesday, and Personal Consumption Expenditures (PCE) index - the Fed's preferred inflation gauge - on Friday.
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