Gold Steadies as Oil Slump Cools Inflation Pressure, Equities Rally

Gold prices have steadied in late U.S. trading on Monday, as a sharp drop in crude oil and lower Treasury yields offset reduced safe-haven demand tied to tentative U.S.-Iran diplomacy.

The spot price of gold is currently trading near $4,056.60 an ounce, up 0.37% from the previous session, while spot silver is trading at $57.940, up 0.87%. The post-Fed setup remains rate-sensitive, with markets still pricing a roughly two-thirds chance of a September rate hike.

The Strait of Hormuz risk premium has cooled, following President Donald Trump's decision to hold off planned strikes on Iran and push for talks aimed at reopening the waterway and limiting Tehran's nuclear program. The market impact was clearest in crude, with WTI falling to the high-$78-to-$79 area and Brent dropping to the low-$83 area.

The mixed read-through for gold is due to lower oil-linked inflation risk, softer yields, and a weaker dollar reducing some macro pressure on bullion. North American equities closed sharply higher as lower oil and yields lifted risk appetite, with the S&P 500 rising 1.48% to 7,600.50.