09:18 AM EDT, 07/16/2024 (MT Newswires) -- Gold rose to the highest in nearly two months early on Tuesday on rising hopes for a cut to U.S. interest rates even as the dollar rose after U.S. retail sales unexpectedly climbed in June.

Gold for August delivery was last seen up US$10.20 to US$2,439.10 per ounce, the highest since May 21.

The rise comes after Federal Reserve Chair Jerome Powel on Monday he has "greater confidence" inflation is slowing to the central bank's 2% target rate amid lower price pressures and a slowing economy.

"Investors responded to Federal Reserve Chairman Jerome Powell's recent remarks hinting at potential interest rate cuts, which favor non-interest-bearing assets like gold," Saxo Bank noted

However U.S. June retail sales came in higher than expected on Tuesday, as the Census Bureau reported sales rose by 0.1% last month, unchanged from May but ahead of the consensus expectations for a 0.4% month over month drop, according to Marketwatch.

The dollar rose following the report, with the ICE dollar index last seen up 0.26 to 104.65.

Treasury yields were mixed after the data, with the U.S. two-year note last seen paying 4.472%, up 0.4 basis points, rising off an overnight low of 4.417%. The yield on the 10-year note was down 3.6 basis points to 4.201%.