Spot gold prices recovered on Monday, climbing 0.9% to $4,197.41 per ounce, reversing a slide that had pushed the metal to its lowest level since June 11.
The rebound coincided with a pullback in crude oil prices, as markets digested reports of advancing peace negotiations between the United States and Iran.
The precious metal's recovery reflects a shift in risk sentiment.
Earlier in the week, gold had retreated from recent highs, pressured by hawkish signals from the U.S. Federal Reserve that reinforced expectations for higher interest rates.
However, the prospect of a diplomatic resolution in the Middle East has reduced the geopolitical risk premium embedded in energy and commodity markets, providing a floor for gold prices.
This development follows a volatile period for safe-haven assets.