Gold Surges Past $4,095 as Middle East Ceasefire Reduces Inflation Risks
Spot gold surged past $4,095 per ounce on Monday as investors sought safe-haven assets following a weekend ceasefire in the Middle East.
The US-Iran military confrontation had been fueling concerns about supply disruptions and inflation. However, President Trump's decision to suspend bombing operations against Iranian installations reduced these risks, leading to a sharp decline in crude oil prices.
Oil prices plummeted over 5% on Monday, with Brent crude momentarily reaching near $100 per barrel earlier last week. The decrease in energy costs is expected to moderate inflationary pressures and provide the Federal Reserve with more flexibility when setting monetary policy.
The Fed's upcoming policy meeting, scheduled for Wednesday, will be closely watched by investors, who are seeking clarity on the potential timeline for rate reductions and the central bank's assessment of prevailing inflation dynamics. Gold typically benefits from lower interest rates, making it an attractive asset in a low-yield environment.