Gold prices surged by more than $100 per ounce on Monday after reports of a new agreement between the United States and Iran. The news triggered strong buying activity and pushed gold to its highest level in a week.
Gold closed at $4,213 per ounce on Friday. When markets reopened on Monday, the metal gained about $50 per ounce. It then continued to rise throughout the trading session. As a result, gold prices increased by more than 2.5 percent in one day.
Gold now trades near $4,330 per ounce. This level marks the highest price recorded in the past seven days. Futures contracts for August delivery also climbed to $4,344 per ounce. The increase reflects renewed investor confidence in the precious metals market.
The rally in gold prices came as oil prices fell by around 4 percent. At the same time, the US dollar weakened sharply. The dollar dropped to its lowest level in ten days. A weaker dollar often makes gold more attractive to international investors.
Tim Waterer, an analyst at KCM Trade, said lower oil prices and a weaker dollar have changed market expectations. He added that easing geopolitical tensions has also supported gold prices. Investors believe the Strait of Hormuz could reopen quickly, reducing uncertainty in energy markets.
Meanwhile, Shehbaz Sharif announced on the social media platform X that the agreement will be officially signed in Switzerland on Friday.
Despite Monday’s rally, gold prices remain nearly 20 percent below their levels at the start of the conflict involving the United States, Israel, and Iran in late February.
Investors have also revised their expectations for US interest rates. Markets now see a 48 percent chance of another rate increase. Last week, that probability stood at 69 percent.
Investors are now waiting for the policy decision of the Federal Reserve System on Wednesday. The meeting will be the first under the leadership of Kevin Warsh. Most analysts expect the central bank to leave interest rates unchanged. The decision could determine the next direction of gold prices in global markets.
