Gold falls to 1-1/2-month low on higher US yields, firm dollar

Gold prices slipped on Wednesday to their lowest point in 1-1/2 months, as high Treasury yields and a firm dollar outweighed optimism over a potential U.S.-Iran peace agreement.

Spot ​gold was down 0.4% at $4,464.64 per ounce, as of 0439 GMT, having ​touched its weakest level since March 30. U.S. gold futures for ⁠June delivery lost 1% to $4,466.40.

"Gold is running out of ⁠puff somewhat against this backdrop of rising yields, and a dollar which has ​a spring in its step courtesy of the hawkish shift in the rates outlook," ​said Tim Waterer, chief market analyst at KCM Trade.

The dollar hovered at a six-week high, making greenback-priced bullion more expensive for holders of other currencies.

Benchmark 10-year U.S. Treasury yields were steady ​at a more than one-year high, raising the opportunity cost of holding non-yielding ​gold.

U.S. signals on Iran remained mixed, with U.S. President Donald Trump warning Washington may still need ‌to strike ⁠Tehran, while Vice President JD Vance said both sides were making progress and did not want a return to conflict.

Philadelphia Federal Reserve Bank President Anna Paulson said the current level of interest rates is appropriate for the moment, putting downward pressure on ​inflation at a time ​when price pressures ⁠remain elevated.

She, however, said it was "healthy" that investors had begun considering scenarios where rates might need to rise.

The U.S. Federal Reserve ​will avoid cutting rates this year, according to most economists polled ​by Reuters ⁠who largely pushed long-held calls for reductions into next year on hopes the current inflation flare-up is temporary.

Investors are waiting for minutes from the Fed's April policy meeting, ⁠due ​later in the day, to gauge the U.S. central ​bank's monetary policy outlook.

Spot silver fell 0.8% to $73.22 per ounce, platinum slid 0.5% to $1,912.67, while palladium rose ​0.2% to $1,356.32.