Gold Surges on US-Iran Tensions Easing, Fed Decision Looms
Gold prices rose over 1% on Monday as tensions between the US and Iran eased, leading to lower oil prices and a decrease in inflation concerns. This development made gold more attractive as an investment, despite its historically low-yielding nature.
The spot price of 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, noted that gold is benefiting from the drop in oil prices and the US dollar index, which fell 0.3%.
The pause in hostilities between the US and Iran has alleviated some of the inflation concerns caused by rising oil prices earlier this year. Waterer said, 'Gold's immediate fate is closely tied to where oil prices head from here... until a more durable peace takes hold.'
Investors are also awaiting the Federal Reserve's policy decision, which is expected to keep interest rates unchanged. However, traders are pricing in an 80% chance of a rate hike in September.