Gold rises as inflation concerns ease

Spot gold jumped 1.3% to $4,103.59 per ounce

Gold prices ​rose more than 1% on Monday as a pause in Middle East hostilities ‌pushed oil prices lower and eased some inflation worries.

Spot gold jumped 1.3% to $4,103.59 per ounce by 0723 GMT.

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.

Iran will halt its own attacks as long as the U.S. does the ​same, a senior Iranian official told Reuters on Sunday. The U.S. pressed pause on its campaign after the president’s advisers expressed worries about ​depleting the U.S. arsenal.

Oil prices were down more than 6% on the day.

Since the ​war 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 U.S. central bank meeting on July 28-29, where market participants widely expect ​rates to ⁠be left unchanged. Traders are pricing in a 74% chance of a hike in September, according to the CME FedWatch Tool.

Spot gold may retest resistance at $4,117, as it managed to stabilise around ⁠a ​key support at $4,038 and bounce strongly, Reuters technical analyst Wang ​Tao said.