FX.co ★ Gold Rises as Oil Prices Drop

Gold rose 1% toward $4,100 an ounce on Monday, rebounding from nine-month lows as oil prices fell sharply following a pause in hostilities between the US and Iran over the weekend, easing fears of supply disruptions and inflation. The US halted its nearly two-week campaign of strikes against Iran late Friday without a formal announcement, while Tehran said it had ended its retaliatory attacks and held talks with Oman on the situation in the Strait of Hormuz. Gold had come under pressure in recent weeks amid intensifying conflict in the Middle East, with supply risks extending from the Strait of Hormuz to the Red Sea. At the same time, the Federal Reserve is widely expected to keep interest rates unchanged on Wednesday and then raise them in September, though some market participants see a chance of a hike as early as this week’s meeting in response to renewed inflationary pressures.