Gold Rises as US Dollar Weakens Amid US-Iran Deal Hopes

Gold prices rose on Monday as the US dollar weakened and optimism over a possible US-Iran agreement sent oil prices sharply lower. The precious metal gained 0.3% to $4,052.96 per ounce, while US gold futures edged 0.2% higher to $4,051.70.

The decline in oil prices was triggered by US President Donald Trump's decision to hold off a fresh attack on Iran as he sought a quick deal that would halt Tehran's nuclear ambitions and reopen the Strait of Hormuz. Oil prices slumped more than $4 a barrel after Trump announced that talks with Iran will happen on Monday.

UBS analyst Giovanni Staunovo said, 'We are back to the previous correlation, with gold rising when crude oil falls, and gold falling when oil rises.' He noted that the lower oil price is reducing modestly US rate hike expectations for this year, and supporting gold.