Gold Rallies as Oil Prices Plummet on Iran Deal Hopes

Gold prices rebounded on Monday as oil prices slumped more than $4 a barrel following President Donald Trump's decision to delay new strikes on Iran and pursue a diplomatic agreement instead.

The weaker U.S. dollar, which fell to its lowest level since mid-June after authorities intervened in the foreign exchange market to support the yen, also supported gold.

'We are back to the previous correlation, where gold rises when oil falls, and gold falls when oil rises,' said Giovanni Staunovo, an analyst at UBS.

The precious metal has faced significant headwinds since the start of the U.S.-Iran conflict, with high energy prices fueling inflation and increasing the likelihood that interest rates would stay higher for longer.