Gold Surges on Pause in Middle East Hostilities and Falling Oil Prices

Gold prices rose over 1% on Monday as a pause in Middle East hostilities led to lower oil prices, easing inflation concerns and making gold more attractive. The U.S. dollar index also fell 0.3%, making greenback-priced metals more affordable for other currency holders.

The price of spot gold reached $4,110.56 per ounce by 0200 GMT, while U.S. gold futures gained 1% to $4,112.10. Tim Waterer, chief market analyst at KCM Trade, said that gold is benefiting from the dual price action in oil and the U.S. dollar.

Oil prices dropped more than 4% for the day, a significant decrease since the conflict began earlier this year. Higher oil prices had driven inflation concerns and expectations of central bank rate hikes, which have weighed on gold. However, Waterer remains constructively bullish on gold in the long term, but notes that its immediate fate is closely tied to where oil prices head from here.