Gold Jumps as Iran Deal Optimism Cools Inflation Fears

Gold prices surged Monday after Yahoo! Finance Canada reported that President Donald Trump signaled meaningful progress in US-Iran deal negotiations, lifting bullion while hammering oil prices lower.

Spot gold climbed as much as 1.6%, reaching roughly $4,580 an ounce during the session. That advance effectively wiped out all of last week’s modest losses. By mid-afternoon in New York, prices held around $4,570 an ounce, with silver also gaining sharply at over $78 an ounce.

Iran Talks Drive Risk Sentiment Across Markets

Trump publicly stated that ongoing negotiations over an interim Iran ceasefire extension and restored passage through the Strait of Hormuz were advancing well. Secretary of State Marco Rubio also indicated positive developments were coming on the Hormuz situation. The prospect of eased supply constraints sent Brent crude tumbling roughly 5% on the session, falling beneath $100 a barrel. A softer dollar accompanied the oil decline, with the Bloomberg Dollar Spot Index slipping around 0.3%. Because gold is priced in dollars, a weaker greenback typically lowers the purchase cost for international buyers, adding further support to bullion.

Why Gold Has Struggled Since Conflict Began

The Iran conflict, which escalated in late February, initially sent energy prices soaring and ignited inflation anxiety. That in turn drove traders to price in aggressive Federal Reserve rate increases. Rate-hike expectations weigh directly on gold, which generates no yield. Bullion had shed roughly 13% from its peak since hostilities began. The money market is now pricing near-certain Fed rate increases by December. New Fed Chair Kevin Warsh, who recently took the helm, is being watched closely for signals on his economic outlook and the pace of tightening.

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Analysts Urge Caution on the Rebound

Not everyone sees gold’s bounce as durable. Christopher Wong, a strategist at Oversea-Chinese Banking Corp., cautioned that critical details around Iran’s nuclear program remain unresolved. He also flagged that holiday-thinned trading in the US, UK, Hong Kong, and South Korea left markets vulnerable to exaggerated moves. Antonio Di Giacomo at XS.com noted that gold retains a solid safe-haven foundation. However, he pointed to elevated interest rates, persistent inflation expectations, and a still-resilient dollar as meaningful headwinds. Any upside moves in gold, he wrote in a Monday note, may remain limited and prone to sharp reversals. Platinum and palladium also advanced on the session alongside gold and silver.

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