09:26 AM EDT, 08/01/2024 (MT Newswires) -- Gold prices rose early on Thursday, pushed higher by rising geopolitical tensions while U.S. treasury yields stick near six-month lows after Federal Reserve Chair Jerome Powell indicated the central bank could begin a cycle of interest-rate cuts in September.

Gold for December delivery was last seen up US$25.20 to US$2,498.20 per ounce, nearing the record high of US$2,506.40 set on July 18.

Gold is returning to its role as a safe haven after the Wednesday assassination of Ismail Haniyeh, head of the political wing of Hamas, in an airstrike in Tehran. While Iran and Hamas have both blamed Israel, which is at war with the Iran-backed militant group, Israel has so far offered no comment. Iran Supreme Leader Ayatollah Ali Khamenei vowed to take revenge for the attack, raising the risk of a spreading Middle Eastern war.

The metal is also rising on the prospect of U.S. interest rates cuts, lowering the carrying cost of owning the metal. While the Federal Open Market Committee ended its two-day meeting on Wednesday leaving interest rates unchanged at a 23-year high, Powell said in a press conference that a September cut "could be on the table" if economic reports show inflation continue to move towards the bank's 2% target.

"Gold prices received a triple dose of support from heightened Middle East tensions, lower Treasury yields and a softer dollar after Powell left the door open for a September rate cut," Saxo Bank noted.

However the dollar rose off overnight lows early on Thursday, with the ICE dollar index last seen up 0.25 points to 104.35.

Treasury yields were lower, with the U.S. two-year note last seen down 0.9 basis points to 4.257%, the lowest since Feb.1, while the 10-year note was paying 4.031%, down 0.4 basis points, also a six-month low.