Gold prices rose, supported by a weaker dollar and lower US Treasury yields, as investors grew optimistic about a potential end to the Middle East war, which has stoked fears of higher inflation, reports Reuters.

Spot gold rose 0.9 per cent to $4,830.82 per ounce by 0455 GMT. US gold futures for June delivery gained 0.6pc to $4,853.40.

The US dollar fell to its lowest level in six weeks, making greenback-denominated commodities, including bullion, more affordable for holders of other currencies.

Benchmark 10-year US Treasury yields eased 0.1pc, as hopes of a US-Iran peace deal eased higher-for-longer U.S. interest rate bets.

“The primary driver (for gold) is the optimism about a US-Iran ceasefire that is pushing down longer-term bond yields globally and that kind of created a lower opportunity cost of holding gold and silver,” said Kelvin Wong, a senior market analyst at OANDA.

“If we start to see a break above $4,900, further potential upside cannot be ruled out towards the next intermediate resistance zone, which is at the psychological level of $5,000.”