LONDON: The gold price rose 1.4% to $4,110.56 an ounce on Monday, July 27, as falling oil prices and a weaker US dollar eased inflation concerns during a pause in US-Iran attacks.
US gold futures gained 1% to $4,112.10 by 0200 GMT, according to Reuters market data.
Tim Waterer, chief market analyst at KCM Trade, said gold benefited from simultaneous declines in oil and the dollar. Lower oil prices reduced concerns that energy costs would drive further inflation.
The US dollar index fell 0.3%. A weaker dollar makes gold and other dollar-priced metals cheaper for buyers using other currencies.
Oil prices dropped more than 4% after Iran said it would halt attacks while the United States maintained its bombing pause. The conditional arrangement does not constitute a formal ceasefire.
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Brent crude for September delivery fell 4.9% to $92.02 a barrel, while US benchmark crude declined 5.6% to $84.34, according to the Associated Press.
Higher oil prices had previously raised inflation concerns and strengthened expectations of further interest-rate increases. Higher rates generally weaken demand for non-yielding assets such as gold.
The Federal Open Market Committee will meet on July 28 and 29, according to the Federal Reserve’s official calendar. Economists widely expect policymakers to keep the federal funds rate unchanged.
CME FedWatch data indicated that traders assigned about an 80% probability to the target range being at least 25 basis points higher after the Federal Reserve’s September meeting.
Other precious metals also advanced. Reuters reported that silver rose 2.8% to $59.81 an ounce, platinum gained 2.6% to $1,629.15, and palladium climbed 2.1% to $1,269.43.
