Gold Surges as Oil Prices Plummet Following Trump's Iran Decision

Gold prices firmed up on Monday as oil prices slumped after US President Donald Trump's decision to hold off on fresh attacks against Iran. This slight easing of concerns over inflation and higher interest rates boosted gold, which is traditionally viewed as a hedge against inflation.

The spot price of gold rose 0.4% to $4,055.76 per ounce, while US gold futures increased by 0.9% to $4,054.00. The dollar came under pressure after authorities intervened in the foreign exchange market to support the yen, making dollar-priced bullion more affordable for overseas buyers.

Tim Waterer, chief market analyst at KCM Trade, noted that while gold has made a relatively cheery start to the week, gains remain limited due to uncertainty around oil markets and the Middle East. He added that a sustained break higher would likely require clearer drops in oil prices, a softer dollar, or a shift in Fed rate expectations toward a more dovish stance.