Gold rises from a low of more than a month, but inflation concerns limit gains.

Although gains were constrained by high oil prices that raised concerns about inflation and obscured the outlook for U.S. interest rates, gold prices increased on Tuesday, rising from a more than one-month low touched in the previous session.

As of 02:30 GMT, spot gold was up 0.5% at $4,541.39 per ounce. In the previous session, bullion dropped more than 2% to its lowest level since March 31. The price of US gold futures for June delivery increased by 0.4% to $4,550.70.”After the return of the ‘war trade’ across markets sent gold lower on Monday, prices seem to be digesting a bit,” stated Ilya Spivak, head of global macro at Tastylive.

Gains were limited, though, as “yields and the dollar pushed higher as a rebound in crude oil stoked inflation fears.” That weighed against anti-fiat and non-interest-bearing gold, according to Spivak.

As the United States and Iran continued to negotiate a ceasefire while exchanging blows over the Strait of Hormuz, the dollar increased and Brent crude oil remained above $113 a barrel.

Metals priced in dollars become more costly for holders of other currencies when the value of the US dollar increases.

Higher crude oil prices, on the other hand, have the potential to fuel inflation and raise interest rates. Although gold is regarded as an inflation hedge, its attraction is diminished by high interest rates, which make yield-bearing assets more desirable.

With markets now estimating a 37% possibility of a raise by March 2027, compared to 27% expecting a rate drop a week earlier, traders are essentially pricing out U.S. Federal Reserve rate cuts for this year.

As they fought for control of the Strait of Hormuz with marine blockades, the United States and Iran started fresh attacks in the Gulf on Monday, upending a precarious truce.

As Tehran attempted to disrupt a new U.S. Navy push to open shipping through the Strait of Hormuz, the U.S. military said on Monday that it destroyed six Iranian small boats and intercepted Iranian cruise missiles and drones.

Following an explosion that struck a South Korean ship in the Strait of Hormuz, U.S. markets closed down.

Investors are now anticipating a spate of important U.S. data this week, such as the ADP employment report, the April payrolls report, and U.S. job openings.

Platinum increased 1.3% to $1,970.85, spot silver increased 0.4% to $73.03 per ounce, and palladium increased 1.2% to $1,497.91.