Gold Soars as Oil Tumbles Amid U.S.-Iran Hostilities Pause

The price of gold rebounded on Monday as oil prices tumbled following a weekend pause in U.S.-Iran hostilities. Gold regained above $4,100, rising approximately 1.3% in Reuters' global-markets update.

The decline in oil, down 4.7% to around $92.27, eased the inflation and rate pressure that had weighed on gold through July. The U.S. 10-year Treasury yield also eased four basis points to about 4.63%, reducing near-term inflation expectations.

A softer dollar index softened by roughly 0.3%, further supporting gold prices. According to CME FedWatch, the probability of a September hike remains high at around 76%, but this still leaves room for gold to challenge the $4,185 resistance zone.

The Federal Reserve's decision on July 29 will be a key catalyst for gold prices. A hold at the current rate is the base case, with a softer Warsh tone potentially easing September conviction and giving gold room towards $4,150, then the $4,175 to $4,185 band.