Ammon News - Gold ​rose on Monday as a pause in Middle East hostilities sent ‌oil prices sharply lower and eased some inflation concerns, while investors waited for the U.S. Federal Reserve's policy decision due later this week.

Spot gold rose 0.9% to $4,087.79 per ounce by 0421 GMT. ​U.S. gold futures gained 0.5% to $4,089.90.

"Gold is a clear beneficiary today of the ​dual price action in oil and the U.S. dollar," said Tim ⁠Waterer, chief market analyst at KCM Trade.

The U.S. dollar index (.DXY), opens new tab fell 0.3%, making ​greenback-priced metals more affordable for other currency holders.

Iran will halt its own attacks as long ​as the United States does the same, a senior Iranian official told Reuters on Sunday. The United States pressed pause on its bombing campaign after President Donald Trump's advisers told him they were ​running out of targets and expressed worries about depleting the U.S. arsenal.

Oil prices ​were down more than 4% on the day.

Since the conflict began earlier this year, oil prices ‌have gained, ⁠driving inflation concerns and expectations of central bank rate hikes.

That has weighed on gold, which, despite traditionally being seen as an inflation hedge, becomes less attractive as higher interest rates raise the opportunity cost of holding the non-yielding metal.

"Longer term, I remain ​constructively bullish on ​gold. Gold's immediate fate ⁠is closely tied to where oil prices head from here and the path higher is likely to remain volatile and heavily ​influenced by geopolitical headlines until a more durable peace takes ​hold," Waterer ⁠said.

Focus is also on the Fed meeting on July 28-29, where market participants widely expect rates to be left unchanged. Traders are pricing in a 76% chance of a ⁠hike in ​September, according to the CME FedWatch Tool.

Among other ​metals, spot silver rose 1.7% to $59.16 per ounce, platinum climbed 1.5% to $1,612.04 and palladium gained 1.6% to $1,263.73.


Reuters