XAU/USD climbs 1.24% to $4,102 as reduced geopolitical risks weigh on oil, easing inflation and Fed rate hike concerns.
Gold prices surged at the start of the week, with XAU/USD trading at $4,102, up 1.24% as a temporary pause in US-Iran hostilities improved risk sentiment and sent oil prices sharply lower. West Texas Intermediate (WTI) fell over 7% to near $82.50 per barrel, reducing inflation fears and dampening expectations for Federal Reserve rate hikes.
The metal’s rally reflects its decoupling from its traditional safe-haven role amid the US-Iran conflict. Positive developments, such as mutual restraint pledges from both nations, have pushed gold higher by suppressing energy costs, while escalation typically lifts oil and rate expectations, pressuring the precious metal.
Markets remain cautious as the situation remains fluid, with Iran warning the Strait of Hormuz remains closed. Key focus this week includes the Fed’s interest-rate decision on Wednesday and US PCE inflation data on Thursday, with traders pricing in no immediate rate changes.