Gold prices climb over 1% globally as Middle East tensions ease

Gold rose by more than 1% on Monday after a pause in fighting in the Middle East led to a drop in oil prices, easing concerns over inflation and the prospect of prolonged high interest rates.

Spot gold increased 1.3% to $4,103.99 per ounce by 00:58 GMT.

US gold futures for August delivery gained 0.9% to $4,106.10.

An Iranian official told Reuters on Sunday that Iran would halt its attacks as long as the United States did the same.

Oil prices fell by 5% as investors bet on a diplomatic solution to ease the conflict.

Rising oil prices typically stoke market fears about inflation and the likelihood of interest rates staying higher for longer. While gold is seen as a hedge against inflation, its appeal wanes when interest rates rise since it does not yield returns.

The US dollar and 10-year Treasury yields also declined, providing further support for gold.

The US Federal Reserve is widely expected to keep interest rates unchanged this week, but CME Group's FedWatch tool showed traders still see an 80% chance of a rate hike in September.

Among other precious metals, spot silver rose 2.7% to $59.74 per ounce, platinum gained 2% to $1,619.75, and palladium jumped 2.3% to $1,271.93.