* Oil prices ease by $2 a barrel

* Benchmark 10-year U.S. Treasury yields at highest since

Feb 2025

* JPMorgan cuts 2026 gold price view

(Recasts for U.S. market open)

By Anjana Anil

May 18 (Reuters) - Gold rose on Monday as a weaker U.S.

dollar and lower crude oil prices eased some inflation concerns

though higher bond yields curbed bullion's gains while investors

continued to monitor developments in the Middle East conflict.

Spot gold rose 0.7% to $4,567.49 per ounce as of 09:30

a.m. ET (1330 GMT), after hitting its lowest since March 30

earlier in the session. U.S. gold futures for June

delivery added 0.2% to $4,572.40.

The dollar dipped against most major currencies, making

greenback-priced bullion more affordable for other currency

holders.

"The U.S. dollar index dropped to its session lows - that's

a friendly element for the gold market. Also, crude oil prices

have sold off a little bit," said Jim Wyckoff, market analyst at

American Gold Exchange.

U.S. WTI and Brent crude futures fell around $2 per barrel after

reports citing Iranian media suggested a possible U.S. sanctions

waiver on Iranian oil.

Oil prices have risen since the beginning of the

U.S.-Israeli war on Iran, fanning inflation concerns and

prompting expectations of tighter monetary policy from central

banks, in place of previous bets of interest rate cuts.

Non-yielding gold, a traditional safe-haven asset and

inflation hedge, tends to underperform in high interest rate

environments as investors turn to investments that offer better

returns, like Treasury yields.

"The rising bond yields are a bearish element for the gold

and silver markets. Rising bond yields will probably limit the

upside, if not cause further downside price pressure on the

metals here in the near term," Wyckoff added.

Government bonds globally extended losses on Monday as higher

energy prices driven by the Iran war fuelled inflation concerns

and reinforced expectations of global rate hikes.

Benchmark 10-year U.S. Treasury yields, which

move inversely to prices, climbed to their highest since

February 2025.

Meanwhile, some banks have started trimming their near-term gold

price forecasts due to softer investor demand, with JPMorgan

among the first major lenders to cut its 2026 average gold price

forecast to $5,243 per ounce from $5,708.

Spot silver rose 2% to $77.5 per ounce, platinum

edged 0.1% higher to $1,975.05, and palladium fell 0.6%

to $1,404.75.

(Reporting by Anjana Anil in Bengaluru; Editing by Emelia

Sithole-Matarise)