Gold prices rose on Tuesday, supported by a weaker US dollar and easing energy costs after US President Donald Trump suggested that the war in the Middle East could end soon.
Respite from a potential war-driven surge in inflation would likely reduce the chances of central banks raising interest rates, a positive for non-yielding gold, Reuters said.
Spot gold rose 0.7% to $5,174.49 per ounce, as of 0631 GMT. US gold futures for April delivery rose 1.6% to $5,184.
The dollar fell 0.4%, making greenback-priced bullion cheaper for holders of other currencies.
Gold prices rose "due to the news flow from US President Trump himself, stating that there is a potential for de-escalation ... So what we could see is that potential inflation expectation starts to tone down given this dramatic fall in oil price," said Kelvin Wong, a senior market analyst at OANDA.
Oil prices fell by more than 5% following Trump's comments.
But, the US president also warned that US attacks could rise sharply if Iran sought to block tanker traffic through the Strait of Hormuz, which handles one-fifth of the world's oil supply.
The war has effectively shut the strait, stranding tankers for over a week and forcing producers to halt output as storage fills up, sending energy prices soaring.
Gold prices fell by as much as 2% on Monday as higher energy costs fanned inflation concerns and further dimmed the prospects for a near-term cut in interest rates by the US Federal Reserve.
Investors expect the Fed to keep rates steady at the end of its two-day meeting on March 18, 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.
Spot silver rose 2% to $88.73 per ounce. Spot platinum gained 0.7% at $2,196.35, while palladium lost 0.3% to $1,685.01.
