Gold Edges Higher as US-Iran Tensions Ease

Gold prices edged higher on Monday as tensions between the US and Iran eased, reducing inflation concerns ahead of the Federal Reserve's interest rate decision this week.

The spot gold price rose over 1% to above $4,100 an ounce before paring some gains. This increase coincided with a decline in oil prices to a one-week low, as the US and Iran appeared to have paused attacks on each other for a third straight night.

For months, bullion has been under pressure due to the Middle East conflict, which raised the likelihood of interest rate hikes by the Fed. This would be a headwind for non-yielding assets like gold.

Bart Melek, global head of commodity strategy at TD Securities, noted that the oil market is down from over $100 last week to $90, driving the interest rate outlook lower.