gold prices ended higher tuesday buoyed in part by a decline in us treasury yields after the mostactive futures contract briefly touched its lowest level since march overnight gold found support tuesday from a retreat in us treasury yields said stephen innes managing partner at spi asset management deal or no deal on the us debt ceiling a us debt rating downgrade is a huge possibility he told marketwatch and we could rerun the paradoxical buy the debt of the defaulter dynamic in that case there may be a rally in treasurys as i would expect the market to price in a more dovish fed on a ratings agency downgrade said innes this is gold positive gold prices have retreated for most of may as the dollar has strengthened and treasury yields have risen month to date partly driven by the lack of progress on a us debt ceiling deal in congress though an agreement announced saturday night allowed bill yields to ease tuesday it looks increasingly likely that congress will pass a debt deal to prevent a default said fawad razaqzada market analyst at stonex over the weekend president joe biden and house speaker kevin mccarthy reached a deal to raise the us federal governments debt limit the agreement must now pass both chambers of congress where it is expected that centrists from both parties will band together to pass it investors required rate of return has thus fallen by holding us government debt as the risk of default has fallen in their eyes this is reflected in falling bond yields razaqzada said in a market report as yields dip up goes the appeal of zeroyielding assets on a relative basis the yield on the 10year treasury note was off by 107 basis points at 3697 in tuesday dealings however expectations for another interest rate rise from the federal reserve in june have risen after fridays us inflation data the us dollar has risen over the past month but a closely watched gauge of the greenbacks value against major currencies was trading slightly lower on tuesday the ice us dollar index was off slightly at 10418 weakness in the greenback can provide support for dollardenominated prices of gold overall a resurgent dollar and relief that a us debt ceiling deal has finally been reached have left their marks on gold which sliced below the 1935oz region earlier today to hit its lowest levels in six weeks said marios hadjikyriacos senior investment analyst at xm in emailed commentary it is a troublesome environment for bullion as the steepening of the feds implied rate trajectory has simultaneously turbocharged the dollar and propelled treasury yields higher both of which make the nonyielding metal that is denominated in us dollars less attractive he added gold futures remain lower month to date though prices did reach their secondhighest settlement on record in early may readwhy gold still has a shot to reach a record high this year in order for gold to reach a new record high that would likely require signs of weakness in personal consumption and employment said caesar bryan portfolio manager of the gabelli gold fund in the face of obvious weakness in the real economy there would be tremendous pressure on the fed to become more accommodative he said the fed would be under pressure to be less concerned about inflation however continued reports of a strong labor market in the us would result in a tighter for longer fed which would likely pressure the gold price in the short term said bryan the monthly us employment report will be released friday this content was created by marketwatch which is operated by dow jones  co marketwatch is published independently from dow jones newswires and the wall street journal