June 2 (Reuters) - Gold rose 1% on Tuesday, buoyed by lower U.S. Treasury yields, while weaker oil prices eased fears of higher inflation and elevated interest rates.
Spot gold rose 1% to $4,528.67 per ounce by 1136 GMT. U.S. gold futures for August delivery gained 1.2% to $4,558.60.
Oil prices fell after U.S. President Donald Trump said talks with Iran were ongoing. Lower fuel prices ease inflation worries and reduce bets for higher interest rates.
While gold is traditionally seen as a hedge against inflation, it loses its appeal in a high-interest-rate environment as a non-yielding asset.
"Gold continues to take its cues from the oil market given crude's influence on inflation expectations and, by extension, interest rates, bond yields and the dollar," Saxo Bank analyst Ole Hansen said.
"The metal remains in a short-term downtrend, with a break above $4,630 needed to signal a more constructive outlook and potentially attract fresh momentum buying."
The yield on the benchmark 10-year U.S. Treasury note fell 1.1%, reducing the opportunity cost of holding non-yielding bullion.
Further supporting gold prices, Lebanon announced a partial ceasefire between Hezbollah and Israel on Monday in what would amount to a limited de-escalation of a conflict that has killed thousands of people and inflamed the broader U.S.-Israeli war with Iran.
Investors now await the U.S. nonfarm payrolls report for May, which is due on Friday, to assess resilience in the labour market amid mounting concerns about inflation due to the Middle East conflict.
A host of Federal Reserve board members are also set to speak this week, including Cleveland Fed President Beth Hammack, San Francisco Fed President Mary Daly and Fed Governor Michael Barr.
"We remain positive over the long-term as economic growth risks, worsening geopolitical relations, currency volatility and downside risks to equity markets will continue to support gold's role as a portfolio diversifier," ANZ said in a note.
Among other metals, spot silver rose 2.1% to $76.39 per ounce, platinum gained 1.4% to $1,950.95 and palladium rose 1.3% to $1,379.77.
Reporting by Noel John in Bengaluru; Editing by Kate Mayberry
