Gold Climbs as U.S.-Iran Fighting Pause Sends Oil Prices Tumbling

TLDR

• Spot gold rose 1.1% to around $4,095 an ounce on Monday
• Oil prices dropped sharply after the U.S. and Iran paused military operations over the weekend
• President Trump halted U.S. bombing of Iranian targets on Friday after 13 consecutive nights of strikes
• A weaker U.S. dollar and falling Treasury yields added support to gold prices
• All eyes are now on the Federal Reserve’s policy decision due Wednesday

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Gold prices moved higher on Monday as a weaker dollar and falling oil prices shifted market sentiment. The pause in U.S.-Iran hostilities drove crude prices down sharply, easing inflation fears and sending investors toward safe-haven assets.

Spot gold climbed 1.1% to $4,095.37 an ounce by early Monday morning. Gold futures for August delivery gained 0.7% to $4,097.40 an ounce.

The precious metal had already ended last week with a gain of nearly 1%, despite a volatile trading period.

Oil Drops as Middle East Tensions Ease

Oil prices fell more than 5% on Monday, reversing a large part of last week’s gains. Brent crude had briefly approached the $100-a-barrel mark after concerns grew over potential disruptions to shipping through the Strait of Hormuz and the Red Sea.

BREAKING: Trump has cancelled plans to sharply escalate the war on Iran over concerns that Iranian attacks could dangerously drain the Pentagon’s already diminished stockpile of Patriot antimissile interceptors and other air defense munitions in the Middle East close to zero, per…

— The Hormuz Letter (@HormuzLetter) July 25, 2026

President Donald Trump stopped the U.S. bombing campaign on Friday after 13 straight nights of strikes on Iranian targets. The halt was described as creating room for diplomatic talks.

Iran did not launch retaliatory strikes on neighboring countries hosting U.S. military bases during the weekend. That restraint on both sides helped calm energy markets.

The drop in oil prices is seen as potentially reducing inflation pressures in the near term. Lower energy costs feed through to consumer prices, which could give the Federal Reserve more flexibility on rates.

Federal Reserve Decision Due Wednesday

Market attention is now on the Federal Reserve’s meeting this week. The central bank is widely expected to hold interest rates steady on Wednesday.

However, according to CME FedWatch data, there is still roughly a one-in-three chance of a rate hike. Traders will be watching comments from Fed Chair Kevin Warsh closely.

Investors want clues on when rate cuts might begin and how policymakers view current inflation risks. Gold tends to perform better when interest rates are lower, since the metal pays no yield.

The U.S. Dollar Index fell 0.3% on Monday. A weaker dollar makes gold cheaper for buyers using other currencies, which tends to lift demand.

U.S. Treasury yields also eased, with the 10-year yield on track for its biggest single-day decline in a month.

Other Metals Also Rise

Silver gained 2.1% to $59.39 per ounce. Platinum rose 2.3% to $1,630.83 per ounce.

Copper futures on the London Metal Exchange added 0.4% to $13,693.58 per tonne. U.S. copper futures were little changed at $6.36 per pound.

Investors will continue monitoring U.S. inflation and labor market data in the days ahead for further signals on Fed policy.