Gold Rises with Oil Prices Down, Easing Inflation Worries

Gold prices have risen as oil prices dropped, easing inflation concerns in the market. Spot gold increased by 0.9% to $4,087.79 per ounce, while US gold futures for August delivery rose 0.5% to $4,089.90 per ounce.

Tim Waterer, senior market analyst at KCM Trade, attributes this movement to coordinated actions in oil prices and the dollar. The dollar index fell by 0.3%, making gold more affordable for foreign buyers.

Oil prices plummeted over four percent on Monday, offsetting gains made since the US-Israeli aggression against Iran began in late February. This development had previously fueled inflation worries and expectations of higher US interest rates.

Despite being considered an inflation hedge, higher interest rates can reduce demand for gold as a non-yielding asset. Waterer remains optimistic about gold's long-term prospects but notes that its short-term fate is tied to oil prices and will remain volatile until a more stable agreement is reached.