Spot gold was up 0.2% at $3,328.89 per ounce, as of 0250 GMT, after hitting a more than two-week low on Tuesday.

U.S. gold futures rose 0.3% to $3,343.00.

The dollar index hovered near a one-week low, making bullion more attractive for other currency holders.

The benchmark 10-year Treasury yields remained near a more than one-month low.

“The technical selling of the U.S. dollar and weaker U.S. Treasury yield have benefited gold prices,” OANDA senior market analyst Kelvin Wong said.

A potential catalyst for a gold breakout could be further weakness in the dollar, renewed focus on the fiscal deficit and U.S. tariff policy as Iran-Israel tensions ease, Wong added.

On Tuesday, Iran and Israel signalled that the air war between them had ended, at least for now, after U.S. President Donald Trump publicly scolded them for violating a ceasefire he announced.

U.S. consumer confidence unexpectedly deteriorated in June as households increasingly worried about job availability, another indication that labor market conditions were softening amid rising uncertainty from Trump’s tariffs.

Higher tariffs could begin raising inflation this summer, a period that will be key to U.S. Federal Reserve’s consideration of possible rate cuts, Fed Chair Jerome Powell told members of Congress on Tuesday.

Fed funds futures traders are now pricing in 60 basis points of rate cuts for 2025, with the first move expected to come in September.

According to a report by the Official Monetary and Financial Institutions Forum, one in three central banks managing a combined $5 trillion plan to increase exposure to gold over the next 1-2 years, the highest in at least five years.

Elsewhere, spot silver was steady at $35.90 per ounce, platinum fell 0.3% to $1,312.56, while palladium was down 0.5% at $1,060.50.