Gold rose more than 1% during Asian trading on Monday after a weekend pause in US-Iran hostilities sent oil prices lower and eased concerns that interest rates could remain elevated for longer.

Spot gold traded at $4,106.65 per ounce on Monday, up 1.33% for the day, according to TradingView data.

Oil Pullback Supports Precious Metals

The pause followed reports that advisers warned Trump the military was approaching the limit of viable targets in Iran. They also raised concerns about depleting U.S. munitions stockpiles, leading to the pause in strikes. A senior Iranian official told Reuters that Iran would halt its own attacks as long as Washington maintained the pause.

Oil prices fell as much as 7% amid hopes for a diplomatic resolution. The move reversed recent forecasts that Brent crude could return to its war-era peak near $120 after rising above $100 over the weekend. Energy prices matter for metals because fuel costs feed into inflation measures watched by central banks, while gold is often more sensitive to expectations for real interest rates than to short-term geopolitical headlines alone. Lower energy prices generally reduce inflation pressure, which can lower the likelihood that the Federal Reserve keeps rates high for an extended period. Gold tends to lose appeal when interest rates remain high because the metal does not generate yield.

Traders were still pricing in an 80% probability of a September rate hike, according to the CME Group’s FedWatch Tool, which tracks futures-implied rate expectations. Those probabilities can shift quickly as energy prices, inflation data and central bank guidance change.

Silver, Platinum and Palladium Also Rise

Other precious metals advanced alongside gold. Spot silver rose 2.7% to $59.74 an ounce, extending a recent breakout above key resistance. Platinum gained 2% to $1,619.75, while palladium climbed 2.3% to $1,271.93.

COMEX gold speculators increased their net long position by 4,438 contracts in the week to July 21, bringing the total to 123,586 contracts, according to CFTC data. The positioning data offers a snapshot of how managed money and other speculative traders were exposed before the latest moves in oil and geopolitics.

The Fed’s rate decision this week will test whether the truce lasts long enough to support the rally. A divide among 104 economists over the central bank’s next move highlights the uncertainty surrounding the policy outlook. That uncertainty could increase if fighting resumes and oil prices reverse course.