Crude oil prices fell sharply while gold advanced on Monday after US President Donald Trump announced he was holding off on a potential military strike against Iran to pursue fresh negotiations.
The decision to delay military action in favor of diplomacy triggered an immediate reversal in risk sentiment, easing fears of a supply disruption in the Middle East.
Spot gold climbed 0.7% to trade at $4,067.06 per ounce as investors rotated into safe-haven assets amid the shifting geopolitical landscape.
The precious metal's gain reflects market optimism that a diplomatic resolution could stabilize regional tensions without the immediate shock of conflict.
Conversely, crude oil tumbled as the premium for geopolitical risk evaporated.
The retreat in energy prices underscores how heavily markets had priced in the threat of an attack, with the prospect of negotiations removing the immediate supply-side overhang.