Gold settles higher, silver declines

Gold prices rose, rebounding from their lowest level in nearly two months reached on Monday.

Gold prices rose on Tuesday, rebounding from their lowest level in nearly two months reached on Monday, while silver prices declined, amid market caution ahead of the release of key US economic data this week.

Lower oil prices on Tuesday helped ease concerns over inflationary pressures stemming from the war in the Middle East, supporting gold prices. However, the yellow metal continued to trade below its 100-day moving average amid expectations of tighter monetary policy by the Federal Reserve.

Gold's gains were limited by the continued rise in the dollar and US Treasury yields, with the yield on 30-year Treasury bonds touching its highest level since 2002 during Tuesday's session.

Markets are currently pricing in a 68% probability of a Fed rate hike in October and a 95% probability of a hike in December, according to the CME FedWatch Tool. Investors are also awaiting Wednesday's reading of the Fed's preferred inflation gauge and the monthly jobs report due Friday.