Gold Prices Rise Over 1% Amid Eased Tensions Between US and Iran

Gold prices rose over 1% on Monday as tensions between the US and Iran eased, sending oil prices lower. This alleviated some inflation concerns that had weighed on gold in recent months.

The US-Iran conflict has driven up oil prices since its start earlier this year, pushing inflation expectations higher and increasing the likelihood of central bank rate hikes. As a result, gold's appeal as an inflation hedge has been reduced.

However, with oil prices down over 4% for the day, investors are now reassessing their views on gold. The metal's immediate fate is closely tied to the path oil prices take from here and will likely remain volatile until a more durable peace takes hold.

Investors are also awaiting the Federal Reserve's policy decision this week, where rates are widely expected to be kept unchanged. There is an 80% chance of a hike in September, according to the CME FedWatch Tool.