Gold Prices Surge Amid Weakening Dollar and Easing Tensions

Gold prices rose in the first trading session of the week, despite market uncertainty surrounding the US Federal Reserve's upcoming decision. The precious metal gained 0.93% to reach $4,090 per ounce, supported by a weakening USD and reduced tensions in the Middle East.

The downward momentum of the greenback made gold cheaper for investors holding other currencies, increasing demand in the international market. Additionally, the temporary cooling of conflict-related concerns in the region helped to ease inflationary pressure, which had previously pushed up interest rates.

Oil prices fell by more than 4% during the day, contributing to a decrease in expectations that central banks would continue raising interest rates. This environment is often detrimental to gold, as it does not yield returns and makes holding gold less attractive due to opportunity costs.