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Gold (GC=F) August futures opened at $4,289.40 per troy ounce on Monday, up 1.2% from Friday's closing price of $4,238.80. Gold moved even higher in early trading, rising to $4,360.40 by 6:50 a.m. ET.
The most significant push toward peace in the Middle East occurred over the weekend, and gold prices have responded. The U.S. and Iran have agreed to a renewed ceasefire, opening the door to a 60-day period during which final negotiations will be held. An official agreement is expected to be signed on Friday, paving the way to reopening the Strait of Hormuz and resuming the flow of oil and natural gas around the globe.
The Fed meets this week for a policy-setting meeting where the vast majority of market observers expect it to keep rates unchanged. The ceasefire announcement by the president on Sunday has already driven oil prices (BZ=F) lower, even though resuming a normal flow of oil through the Strait of Hormuz would take months after an agreement is signed.
For now, the headwinds for higher gold prices have been subdued, at least somewhat.