Gold gains 0.4% as Iran deal hopes ease rate-hike bets

Metal	Change	Level
Gold (spot)	+0.4%	$4,055.76/oz
Gold (futures)	+0.2%	$4,054.00
Silver	+0.9%	$58.13/oz
Platinum	+0.5%	$1,649.35/oz
Palladium	+1.7%	$1,294.92/oz

Spot gold rose 0.4% to $4,055.76 per ounce on Monday as a sharp drop in oil prices on US-Iran diplomacy hopes eased inflation and rate-hike concerns.

"We are back to the previous correlation, where gold rises when oil falls, and gold falls when oil rises," Giovanni Staunovo, an analyst at UBS, said. "Today's decline in oil prices slightly reduces expectations of U.S. rate hikes this year, which supports gold."

Oil tumbled more than $4 a barrel, with U.S. crude futures down nearly 7%, after President Donald Trump delayed strikes on Iran to pursue a diplomatic deal that would reopen the Strait of Hormuz. Trump said talks with Iran would begin Monday but declined to set a deadline. A weaker dollar, at its lowest since mid-June, also underpinned bullion. Silver rose 0.9% to $58.13 per ounce, platinum climbed 0.5% to $1,649.35, and palladium firmed 1.7% to $1,294.92.

Gold remains about a fifth below its intraday record of $5,595.47 per ounce set Jan. 29, 2026. Markets now turn to U.S. jobs data this week, including nonfarm payrolls on Friday, which could reinforce or temper September rate-hike expectations.

Fed's 9-3 hold keeps rate-hike risk alive

Three Federal Reserve officials who dissented at last week's policy meeting in favor of a rate hike warned Friday that without an immediate increase in short-term borrowing costs, inflation would remain stuck above the Fed's 2% target, where it has been for more than five years. The central bank voted 9-3 to hold rates steady last Wednesday.

"A sustained break higher would likely require a clearer drop in oil prices, a softer dollar, or a shift in Fed rate expectations toward a more dovish stance," said Tim Waterer, chief market analyst at KCM Trade.

Gold has been trading around $4,070 per ounce, having closed July with a 1% gain — its first monthly increase since February. The metal remains more than a fifth below its levels before the US-Iran conflict began over five months ago.

Bullion traders are also monitoring the Fed's next steps after the New York Times reported that Chairman Kevin Warsh is considering reducing the frequency of policy meetings from eight times a year. Investors have criticized Warsh's attempts to limit guidance to markets on the direction of rates, and the Fed is under mounting pressure to do more to curb inflation. The three dissenting officials warned that waiting too long to act could risk the need for more aggressive policy moves later.

Analysts at Standard Chartered noted that gold could continue to find support in the near term, with seasonal buying expected to underpin prices.

Gold's near-term direction hinges on the interplay between oil prices, the dollar, and Fed policy signals. A sustained diplomatic breakthrough with Iran that keeps crude under pressure would support bullion, while a strong jobs report on Friday could reinforce September rate-hike odds and cap gains.

This article is for informational purposes only and does not constitute investment advice.