Gold Surges on Weaker Dollar and Lower Oil Prices

Gold prices rose modestly on Monday as investors weighed the impact of lower oil prices and a pause in Middle East hostilities. The non-yielding asset gained 0.7% to $4,082.42 an ounce by 09:37 ET (13:37 GMT). This came as U.S. Treasury yields eased, with the 10-year yield on track for its biggest decline in a month.

The drop in oil prices wiped out much of last week's war premium that had briefly pushed gold to the $100-a-barrel mark. A pause in fighting between the United States and Iran over the weekend rekindled hopes for diplomatic efforts to secure a lasting ceasefire agreement.

Market participants are now focused on the Federal Reserve's policy decision later this week, with investors awaiting the Fed's assessment of the economic outlook following recent market volatility. While lower oil prices could reduce inflation pressures, traders will closely scrutinize Chair Kevin Warsh's remarks for clues on the timing of future rate cuts and policymakers' assessment of inflation risks.