Gold rose on Tuesday, boosted by a weaker dollar and lower Treasury yields, as investors awaited inflation data to gauge the Federal Reserve's policy amid ongoing trade tensions and concerns over economic slowdown.

Spot gold increased 0.4% to $2,901.13 an ounce, while U.S. gold futures rose 0.2% to $2,905.70. The dollar index remained near a four-month low, making gold more affordable for overseas buyers. Meanwhile, 10-year U.S. Treasury yields declined.

Ilya Spivak, head of global macro at Tastylive, noted that lower U.S. dollar and Treasury yields were supporting gold, with prices remaining within a stable range of $2,830 to $2,960. A clear breakout from this range is needed to signal a lasting trend.

Trade tensions, particularly U.S. tariffs on Mexico, Canada, and China, have added uncertainty, prompting concerns over inflation and economic growth. Investors are closely watching U.S. Consumer Price Index (CPI) data due Wednesday for clues on the Fed’s next steps.

Gold is viewed as a hedge against political and inflation risks, but rising prices could dampen its appeal if the Fed maintains higher interest rates. Spot silver rose 0.3% to $32.21 an ounce, while platinum and palladium saw slight declines.