Spot gold climbed 1.4% on Monday, marking a decisive reversal after the precious metal had been on track for its largest weekly decline in six weeks.
The rally was driven by a combination of easing geopolitical risk and shifting macroeconomic expectations ahead of a critical Federal Reserve meeting.
The primary catalyst was a reported pause in military hostilities between the United States and Iran.
The primary catalyst was a reported pause in military hostilities between the United States and Iran.
The de-escalation in the Middle East sent oil prices lower, alleviating immediate concerns about supply-driven inflation.
With energy costs softening, the inflationary pressure that had weighed on markets during the recent escalation receded, allowing investors to pivot from safe-haven demand to rate-sensitive positioning.
Market attention is now squarely on the Federal Reserve's upcoming policy decision.