Gold, Silver Prices Rise as Crude Oil Declines Amid Cautious Fed Outlook

The prices of gold and silver rose on Monday as crude oil declined, tempering inflation pressure. Spot gold was quoted near $4,075.60 per ounce, a 0.59% increase. Spot silver traded at $58.290 per ounce, up 0.45%. The market's cautious posture ahead of the Federal Reserve's decision scheduled for Wednesday constrained gold's upward movement.

Market participants maintained a watchful eye on the Strait of Hormuz, which continues to represent the central macro risk premium for energy markets and, consequently, for gold. The recent halt in hostilities between the U.S. and Iran alleviated immediate pressure on crude prices, easing some oil-driven inflation pressure.

However, the shipping route has not returned to normal, leaving gold supported by headline risk, while elevated real-rate risk restricts follow-through buying. The Federal Reserve's decision is expected to have a significant impact on gold prices, with financial markets assigning a meaningful probability to a 25-basis-point rate increase.