Gold Surges Over 5% as US-Iran Tensions Ease and Oil Prices Fall

Gold and silver prices surged in both global and domestic markets during the week ended August 7, driven by easing geopolitical tensions between the United States and Iran, falling crude oil prices, a weaker US dollar, and expectations of Federal Reserve rate cuts.

The sharp decline in crude oil prices was a key driver of the rally, with Brent crude falling from $90.12 a barrel on July 31 to about $83.3 during the week, while West Texas Intermediate futures declined 4.5% to $80.89 per barrel on Monday alone.

Gold recorded its first monthly gain in July and carried the momentum into August, with prices surging over 5% for the week. Silver outperformed gold, climbing approximately 6.5% during the same period.

The global gold market witnessed a steady uptrend throughout the week, driven primarily by developments in US-Iran relations. On Sunday, August 2, US President Donald Trump announced that he had called off a planned strike on Iran and would begin fresh negotiations with Tehran, raising hopes for a diplomatic resolution to the conflict.

Spot gold opened the week at approximately $4,055.76 per ounce on Monday, August 3, up 0.4% from the previous session, as oil prices slumped over 5% following the announcement. Comex gold futures rose 0.9% to $4,054.00.

By Tuesday, August 4, spot gold steadied around $4,055.39 per ounce as markets awaited clarity on the Federal Reserve's interest rate policy and the Middle East conflict. However, analysts noted that gains remained limited given the uncertainty surrounding oil markets and geopolitical developments.