Gold rose after a softer-than-expected inflation reading bolstered bets that the Federal Reserve will cut interest rates later this year. 

Underlying US inflation rose in May by less than forecast for the fourth month in a row, suggesting companies are finding ways to limit how much of higher costs from tariffs they pass through to customers. 

The dollar and bond yields pushed lower after the print, sending bullion higher by as much as 1.1% before paring some of the gains. Bullion typically benefits from a lower rate environment as it pays no interest. 

Gold is helped by the benign reading in inflation, which lifted the prospect for a rate cut, perhaps sooner than the October date currently priced in by the market, according to Ole Hansen, head of commodities strategy at Saxo Bank A/S. 

Still, the precious metal is hovering around its recent ranges and "we need to see economic data deteriorate further" for gold prices to break away, said Hansen. 

Uncertainties over global trade tensions have rattled markets this year, boosting gold's allure as a store of value in turbulent times and powering a year-to-date advance of nearly 27%. While the rally has cooled in recent weeks, lingering worries over the economic impacts of Trump's tariff policies are keeping the precious metal close to a record reached in April. 

Bullion rose 0.3% to $3,334.78 an ounce as of 10:35 a.m. in New York. The Bloomberg Dollar Spot Index declined 0.2%. Silver fell, while palladium rose.  

Source: Bloomberg