Gold Jumps Over 1% as Oil Slumps and Middle East Tensions Ease

Gold prices started the week with a gain of more than 1% on international markets after a pause in fighting in the Middle East triggered a sharp pullback in oil. Crude dropped around 5% as investors grew more confident that the latest US‑Iran confrontation might give way to diplomacy, easing fears of a prolonged energy shock.

For gold, the shift in narrative is important. The metal is widely viewed as a safe‑haven asset, but it does not pay interest, so it tends to struggle when inflation worries push bond yields higher. With oil suddenly sliding, markets are reassessing how persistent inflation will be and whether central banks really need to keep policy as tight as previously feared. That has given bullion some breathing room against the backdrop of still‑elevated US yields.

A slightly softer US dollar also helped support prices in other major currencies. Even so, gold remains near record territory, where bouts of profit‑taking can quickly cap rallies. Analysts note that the next leg will likely be determined by geopolitics: a renewed flare‑up in the region could send safe‑haven demand surging again, while a durable truce and further cooling of inflation expectations would make it harder for gold to break convincingly higher from here.