The weekend suspension of mutual strikes between the United States and Iran triggered a sharp reversal across commodity markets on Monday, with Brent crude futures plunging as much as 7.4% to below $90 a barrel before paring losses. Spot gold rose 1.3% to $4,103.99 an ounce, while US futures for August delivery added 0.9% to $4,106.10. The move snapped a pattern in which bullion had fallen during the six-week-old conflict, as oil-driven inflation fears had pushed up interest-rate expectations and punished the non-yielding asset.

The mechanism ran in reverse: cheaper oil eased concerns about energy-led inflation, reducing pressure on central banks to maintain restrictive monetary policies. The US dollar index fell 0.3%, making dollar-priced metals cheaper for overseas buyers, and yields on 10-year Treasury notes declined, further lifting gold’s appeal. London-based analysts noted that the metal had benefited from the coincidence of lower crude and a weaker greenback, though they cautioned that the short-term outlook remained tightly linked to oil prices and any resumption of hostilities.

Regional markets reflected the shift. In Dubai, 24-karat gold climbed to 493.50 dirhams per gram, recovering most of July’s losses but remaining below the month’s peak above 500 dirhams. On India’s Multi Commodity Exchange, the August gold contract jumped 0.78% to 144,200 rupees per 10 grams. Broader risk assets also gained: European and US equity futures advanced, while Asian bourses edged lower as investors weighed technology-sector earnings and capital spending on artificial intelligence. The de-escalation, however, did not erase all caution; fresh US tariffs of 10–12.5% on imports from several trading partners kept trade-policy uncertainty alive.

The next factual milestone is the Federal Reserve’s two-day meeting beginning Tuesday, where rates are widely expected to remain unchanged. Traders, however, still price a roughly 80% probability of a rate increase in September, according to the CME FedWatch tool. The central bank’s policy statement and the chair’s press conference will be parsed for any shift in the inflation outlook, while upcoming US consumer price and labour-market data will further shape expectations. Geopolitical developments remain the wildcard that could rapidly reprice energy and bullion markets.