Gold rose on Wednesday as the U.S. dollar and Treasury yields fell, while market participants monitored a fragile ceasefire between Israel and Iran.

Spot gold was up 0.2% at $3,328.89 an ounce, as of 0250 GMT, after hitting a more than two-week low on Tuesday. U.S. gold futures rose 0.3% to $3,343.00.

The dollar index (.DXY), opens new tab , hovered near a one-week low, making bullion more attractive to holders of other currencies. The benchmark 10-year Treasury yield remained near a more than one-month low.

"Technical selling in the U.S. dollar and weaker U.S. Treasury yields have benefited gold prices," said Kelvin Wong, senior market analyst at OANDA.

Potential catalysts for gold prices to rise could be a weaker dollar, renewed focus on the fiscal deficit and U.S. tariff policy as Iran-Israel tensions ease, Wong added.

On Tuesday, Iran and Israel signaled that their air war was over, at least for now, after U.S. President Donald Trump publicly rebuked them for violating a ceasefire he declared.

U.S. consumer confidence unexpectedly deteriorated in June as households grew more concerned about job availability, another indication that labor market conditions are weakening amid growing uncertainty over Trump's tariffs.

Higher tariffs could start to boost inflation this summer, a period that will be key to the U.S. Federal Reserve's consideration of possible interest rate cuts, Fed Chairman Jerome Powell told lawmakers on Tuesday.

Fed fund futures traders are now pricing in a 60 basis point rate cut for 2025, with the first move expected in September. USDIRPR/

According to a report by the Official Monetary and Financial Institutions Forum, one in three central banks are managing a combined $5 trillion plan to increase exposure to gold over the next 1-2 years, the highest in at least five years.

Elsewhere, spot silver was steady at $35.90 an ounce, platinum fell 0.3% to $1,312.56, while palladium fell 0.5% to $1,060.50.(alg)

Source: Reuters