Gold Prices Surge as Mideast Fighting Halts
Gold prices climbed higher on Monday as the pause in fighting between the US and Iran eased oil supply risks and inflationary concerns. The metal rose by as much as 1.1% to near $4,100 an ounce after a nearly two-week run of strikes against Iran was halted without explanation.
The halt in hostilities reduced the likelihood that the Federal Reserve may raise interest rates, creating headwinds for non-yielding bullion like gold. However, gold has largely hovered around $4,000 an ounce since late June, with a wave of dip-buying keeping the metal above the psychological threshold.
The recent rise in energy costs had stoked inflationary pressures and increased the likelihood of higher interest rates, but the pause in fighting between the US and Iran has alleviated those concerns. The Bloomberg Dollar Spot Index slipped 0.2% as a result.