Gold Surges 1.5% as Middle East Tensions Ease

Gold prices surged at the start of the week as tensions in the Middle East eased following a pause in hostilities between the US and Iran. The move led to softer rhetoric on the geopolitical front, which in turn reduced inflation concerns and expectations for Fed rate hikes.

The weakened US dollar provided a fresh boost to gold prices, pushing them above the $4100 barrier after finding support at the key $4000 level. Gold prices advanced around 1.5% in Asian trading.

While the price action is encouraging, analysts caution that the technical structure remains fragile and needs to sustain gains above the 20-day moving average ($4072) to maintain a slight bullish bias.