Gold Prices Soar on Oil Price Drop, Fed Meeting Looms

Gold prices surged on Monday as a sharp decline in oil prices eased inflation concerns and weighed on the US dollar (USD) and Treasury yields.

The move followed a pause in hostilities between the US and Iran, which reduced worries about a potential escalation in global tensions.

Lower oil prices also improved the outlook for non-yielding assets, such as gold, ahead of this week's Federal Reserve meeting.

ING's Warren Patterson and Ewa Manthey report that gold should remain supported near current levels if yields stay contained.

However, any hawkish surprises from the Fed could limit further upside in the near term, cautioning investors to be prepared for a potential cap on gold prices.