Gold rises as U.S.-Iran fighting pause enters third day

Gold climbed toward $4,100 an ounce on Monday as a pause in hostilities between the United States and Iran entered its third day, easing oil-driven inflation concerns that had weighed on the metal for weeks. Silver outperformed, jumping nearly 3% to around $59.85 an ounce, while platinum and palladium also advanced.

Ceasefire Hopes Lift Precious Metals

The rally came after the U.S. and Iran refrained from military strikes for a second consecutive day on Sunday, with Tehran's army spokesperson confirming on state television that Iran had also halted attacks. The New York Times reported that President Trump opted last week to delay plans to intensify the American offensive against Iran, at least temporarily. Iran's Foreign Ministry spokesperson Esmaeil Baghaei said Omani officials had visited Tehran over the weekend to discuss the Strait of Hormuz, calling the discussions "productive".npr+1

The de-escalation reduced the risk of further oil-price surges that had fueled rate-hike expectations. As recently as last week, money markets were pricing in a 34% chance of a Federal Reserve rate hike at its July meeting, up from 10% the week before. A sustained pause in fighting could ease those bets, supporting non-yielding assets like gold.tmgm+1

A Bruising Correction

Gold had been battered since the US-Iran conflict escalated in late February, falling more than a fifth from a record near $5,400 reached in January. Reuters reported in late January that spot gold had surged past $5,200 an ounce as the dollar plunged to a near four-year low. The metal's fortunes reversed sharply after fighting began, with oil-fueled inflation fears and a stronger dollar dragging prices toward $4,000 by mid-year.cnbc+2

Gold spent much of July locked in a range between $4,000 support and $4,100 resistance. On July 16, it posted its largest weekly decline since early June, falling 3.4% to around $3,968. A ceasefire deal signed in mid-June effectively collapsed after Iran persisted in blocking the Strait of Hormuz, and Trump declared the agreement "over" on July 8, sending gold tumbling 2% as oil surged.goldsilver+4

Outlook Hinges on Diplomacy

Analysts remain cautious about whether gold's recovery can hold. "The recent rebound feels mostly flow-driven, sparked by a bit of dip-buying and sheer relief that the $4,000-an-ounce floor held," Ryan McKay, senior commodity strategist at TD Securities, said last week. "Energy prices are just starting to pick up again, and that concern will ultimately cap the upside".fxstreet

HSBC ↘ 1.34% lowered its 2026 average gold price forecast to $4,560 from $4,864 in early July, citing a hawkish shift in monetary policy expectations, though it maintained a year-end target of $4,750. Whether the US-Iran pause hardens into a durable ceasefire — or collapses as previous attempts have — will likely determine whether gold can reclaim the ground it has lost since January.reuters