Gold prices rose on Monday, rebounding above the $4,550 per ounce level, as easing geopolitical tensions between the United States and Iran softened inflation fears and supported demand for the precious metal.
Spot gold traded between roughly $4,550 and $4,578 per ounce, recovering earlier losses as investors reacted to signs of progress in negotiations that could lead to a partial de-escalation in the Middle East and the possible reopening of the Strait of Hormuz, a critical route for global oil shipments.
The improvement in sentiment also weighed on crude oil prices, helping reduce concerns over an energy-driven inflation shock that had previously supported expectations of tighter monetary policy. Analysts said the shift in oil outlook has played a key role in gold’s short-term rebound, alongside a softer US dollar.
The proposed US–Iran framework is reported to include steps toward easing hostilities, releasing frozen Iranian assets, and continuing discussions on Iran’s nuclear programme. However, US President Donald Trump said Washington would maintain its blockade of the Strait of Hormuz until a formal agreement is reached, highlighting lingering uncertainty in the negotiations.
Despite Monday’s gains, gold remains volatile, reflecting competing forces in global markets. On one hand, easing energy prices and improved risk sentiment have reduced safe-haven demand. On the other, concerns over the durability of any US–Iran deal and shifting expectations around US Federal Reserve policy continue to provide support.
Traders are closely watching central bank signals, particularly after recent indications that the Federal Reserve may be less inclined toward near-term monetary easing, which could limit further upside for non-yielding assets like gold.
On a broader view, gold remains significantly higher year-on-year, underscoring its continued appeal as a hedge against geopolitical risk, inflation uncertainty, and global financial instability.
