Gold Gains as Middle East Tensions Ease, Fed Decision Looms

Gold prices rose modestly on Monday as concerns about oil-driven inflation eased after the US and Iran paused their tit-for-tat strikes.

The pause in fighting led to a decline in oil prices, which had surged around 20% over two weeks. Oil prices had climbed due to supply disruption concerns following Iran's attacks on commercial ships in the Strait of Hormuz.

The US Federal Reserve is set to make its interest rate decision later this week, with most expecting it to hold rates steady at 3.5-3.75%.

David Doyle, head of economics at Macquarie, said that even if the Fed holds rates unchanged, there's a 35% chance of a hike.