Gold Soars Over 1% Amid Iran Pause and Oil Price Tumble

Gold prices surged over 1% on Monday after hostilities in the Middle East paused, causing oil prices to tumble by 5%. This easing of tensions has alleviated concerns about inflation and prolonged high interest rates. The U.S. Federal Reserve is expected to keep interest rates unchanged this week, but there's still an 80% chance of a hike in September.

Iran announced it would halt its attacks as long as the United States does the same, according to a senior Iranian official. The pause in hostilities has led investors to hope for a diplomatic solution that would de-escalate the conflict and reduce oil prices.

The dollar and yields on the 10-year U.S. Treasury note fell further supporting gold. Spot gold rose 1.3% to $4,103.99 per ounce, while U.S. gold futures gained 0.9% to $4,106.10. The appeal of gold as a non-yielding asset diminishes in a high-interest-rate environment.