Gold prices rose on Tuesday, rebounding from recent losses, as a fall in oil prices helped to ease some worries over an energy-induced inflation burst and central bank interest rate increases.

By 06:18 ET (10:18 GMT), spot gold had jumped by 1.0% to $4,528.32 an ounce, while gold futures gained 1.2% to $4,558.62 an ounce.

The yellow metal fell sharply in the prior session, after media reports said Iran had halted sending mediated messages to the U.S. in response to increased Israeli military activity against Iran-backed Hezbollah in Lebanon.

The development sparked heightened concerns over a prolonged war in the Middle East which would leave the Strait of Hormuz effectively shuttered for an extended period of time. Worries have abounded that continued closure of the strait, a vital waterway for a fifth of the world’s oil, could spark an energy-fueled inflation wave that may lead central banks to hike interest rates.

This, in turn, would likely not bode well for non-yielding assets, including gold.

Meanwhile, Brent crude futures, the global oil benchmark, dipped, after having surged in the preceding session.

"Gold prices have diverged from oil trends due to concerns of persistent inflation driven by a more varied set of causes, and rising real interest rates," analysts at Deutsche Bank said in a note.

U.S.-Iran talks uncertainty

Lebanon has announced a partial ceasefire between Iran-backed Hezbollah militants and Israel, although Israel’s military said it had intercepted two projectiles fired from Lebanon on Tuesday, according to Reuters.

Citing Lebanon’s embassy in Washington, Reuters reported that truce was limited and would not end the fighting in Lebanon, which has become a sticking point in peace negotiations between the U.S. and Iran. The embassy called on Israel, an ally of the U.S., to refrain from striking Beirut and Hezbollah-controlled suburbs, the report said.

Along with launching a joint assault with the U.S. on Iran in late February, Israel has also sent military forces into southern Lebanon.

U.S. President Donald Trump has stressed that Hezbollah had promised, through mediators, not to attack Israel. Meanwhile, Israeli Prime Minister Benjamin Netanyahu has pledged to pull back from assaulting Beirut, Trump claimed.

Earlier, the president told ABC News on Monday that he thinks a peace deal with Iran that would extend an ongoing ceasefire and reopen the Strait of Hormuz could happen "over the next week," after a report said Tehran had stopped communications with Washington.

The president said “there was a little glitch,” likely referring to Iran’s objection to Israeli aggression against Lebanon, which had reportedly spurred Tehran’s walking away from negotiations.

It was not immediately clear whether U.S.-Iran negotiations had resumed.