Gold prices rose on Tuesday as investors await diplomatic efforts aimed at easing the US-Iran conflict, hoping to mitigate inflation risks stemming from higher oil prices and to gauge the path of US interest rates.

Spot gold rose 1.2% to $4,054.24 per ounce by 05:29 GMT, while US gold futures for August delivery climbed 1.1% to $4,059.10 per ounce.

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Among other precious metals, silver gained 2.8% to $57.99 per ounce, platinum rose 1% to $1,610.06, and palladium advanced 1.2% to $1,267.68. In related developments, oil prices fell on Tuesday as markets monitored reports of mediation efforts between the US and Iran amid fresh exchanges of attacks between the two sides. The recent escalation in the conflict pushed oil prices to their highest in over a month on Monday, as more US policymakers argued that interest rates may need to rise to curb persistent inflation. While the Federal Reserve is widely expected to hold rates steady at its meeting next week, traders now see a 64% probability of a rate hike in September.