Gold Prices Rise as Iran-US Tensions Ease, Crude Oil Plummets

Gold prices rose on Monday as tensions between US and Iranian forces eased, causing crude oil prices to plummet. This development helped alleviate concerns about inflation and higher interest rates in the week leading up to the Federal Reserve's (Fed) meeting.

Spot gold gained 1% to $4,093.34 per ounce by 1030 GMT, while US gold futures for August delivery rose 0.6% to $4,095.60. Analyst Ross Norman attributed this increase to a pause in hostilities and the resulting decline in oil prices.

The US dollar index dropped 0.2%, making greenback-priced bullion more affordable for buyers overseas. This trend is particularly significant given that investors are eyeing the Fed's interest rate decision meeting on Wednesday, with about 34% of market participants anticipating a rate hike.