Spot gold was up 0.2% at $4,548.14 per ounce as of 1:41 p.m. ET (1741 GMT), after hitting its lowest since March 30. U.S. gold futures for June delivery settled 0.1% lower at $4,558.
The dollar fell 0.3% against major currencies, making greenback-priced gold more affordable for buyers holding other currencies.
“The U.S. dollar index dropped to its session lows - that’s a friendly element for the gold market,” said Jim Wyckoff, market analyst at American Gold Exchange.
He added, however, that rising bond yields would probably limit the upside “if not cause further downside price pressure on the metals here in the near term”.
Government bonds globally extended losses on Monday as higher energy prices driven by the Iran warstoked inflation fears and reinforced expectations of central-bank rate hikes.
Benchmark 10-year U.S. Treasury yields climbed to their highest since February 2025.
Non-interest-bearing gold loses its appeal when interest rates and bond yields are high as investors turn to assets offering better returns.
Meanwhile, oil edged up about 2% to a two-week high on concerns over supply disruptions. Prices were down earlier in the session after reports citing Iranian media suggested a possible U.S. sanctions waiver for Iranian oil.
Brent crude has risen about 55% since the beginning of the U.S.-Israel war against Iran on February 28, while spot gold has fallen around 13.8% in that period.
Meanwhile, some banks have started trimming their near-term gold price forecasts as investor demand slips, with J.P. Morgan among the first major lenders to cut its 2026 average gold price forecast to $5,243 per ounce from $5,708.