Gold prices remained above $4,000 per ounce as oil prices declined sharply, U.S. Treasury yields eased and investors awaited the Federal Reserve’s interest-rate decision.

Following Monday’s trading session, spot gold gained 0.59%, while silver traded near $58.29 per ounce, up 0.45%.

Falling Oil Prices Support Gold

The main support came from the temporary pause in attacks between the United States and Iran, which reduced pressure on global energy markets.

Brent crude settled at $85.87 per barrel, down 6.3%, while WTI fell 7.5% to $82.61 per barrel.

Lower oil prices helped ease inflation concerns and pushed the 10-year U.S. Treasury yield down to around 4.6%. This supported gold by reducing the opportunity cost of holding the non-yielding metal.

Markets Remain Cautious Ahead of the Fed

Despite support from lower oil prices and easing yields, gold has yet to stage a strong breakout as investors await the Fed’s decision on Wednesday.

The possibility of a 25-basis-point rate increase has not been completely ruled out. This has kept market sentiment cautious, as higher real interest rates could continue to weigh on gold.

The Strait of Hormuz Remains a Key Risk

Tensions surrounding the Strait of Hormuz have temporarily eased, but oil transportation has not yet returned to normal.

This means geopolitical risks have not fully disappeared. Should tensions escalate again, safe-haven demand could continue to support gold prices.

Conclusion

Gold remains above the $4,000-per-ounce level, supported by falling oil prices, lower Treasury yields and ongoing geopolitical uncertainty.

However, the next major move will depend heavily on the Federal Reserve’s decision and the market’s reaction to its policy guidance this week.

Source: Kitco