Gold prices climbed above $4,300 per ounce on Monday, extending gains for a third consecutive session after the United States and Iran reached a preliminary peace agreement aimed at reopening the Strait of Hormuz and restoring stability to Middle East energy flows.
Spot gold rose to $4,336.74 per ounce, up 2.72% on the day, supported by a sharp decline in oil prices following the announcement of the deal. Brent crude fell to a two-month low, easing inflation expectations linked to energy costs and reducing pressure for further interest rate hikes.
The agreement, expected to be signed in Switzerland on June 19, reportedly includes provisions for reopening the Strait of Hormuz, lifting blockades, sanctions relief for Iran, and steps toward dismantling Tehran’s nuclear programme, according to officials involved in the discussions.
The easing of geopolitical tensions has shifted market focus toward monetary policy decisions this week. The US Federal Reserve, under new chair Kevin Warsh, is widely expected to keep interest rates unchanged at its first policy meeting. The Reserve Bank of Australia is also expected to hold rates steady, while the Bank of Japan is seen considering a rate increase to support its currency.
Gold, often seen as a hedge against inflation and uncertainty, has benefited from the recent drop in energy prices, which has reduced near-term inflation fears.
Despite the recent rally, the metal is still down about 5% over the past month, though it remains more than 28% higher than a year ago, reflecting sustained demand amid broader geopolitical uncertainty.
