Gold prices experienced a decline on Monday, influenced by the resurgence of U.S.-Iran tensions that drove oil prices upward, alongside the prevailing expectations of interest rate increases by the U.S. Federal Reserve, which further exerted pressure on the metal. Spot gold experienced a decline of 0.5%, trading at $4,067.99 per ounce, as of 0045. U.S. gold futures for August delivery declined by 0.4%, settling at $4,081.20. Iran launched missiles and drones at U.S. military sites in Kuwait and Bahrain early on Sunday, shortly after U.S. President Donald Trump threatened to wipe out the Iranian leadership if they did not adhere to the agreement to end their war.

Tehran and Washington have reached an agreement to cease recent hostilities in the Gulf and to reinitiate discussions concerning their ongoing dispute over the Strait of Hormuz, as reported. Oil prices experienced an increase on Monday, a development attributed to a series of reciprocal strikes between the United States and Iran in the Middle East. This escalation highlighted the precarious nature of their interim peace agreement and further impeded energy transportation through the Strait of Hormuz. Data released on Thursday indicated that U.S. inflation experienced an uptick in May, surpassing 4.0% for the first time in three years, driven by rising energy prices due to the conflict in the Middle East.

Traders anticipate three rate hikes from the Federal Reserve this year and are assigning a roughly 77% probability to an increase in December, as indicated by the CME FedWatch Tool. Gold commenced trading at a premium in India last week for the first time in six weeks, driven by a price correction that stimulated buying, even as demand remained lacklustre in the leading consumer, China. Gold speculators increased their net long positions by 91 contracts, bringing the total to 113,010 for the week ending June 23. Spot silver fell 1.1% to $58.49 per ounce, platinum gained 0.4% to $1,620.15, while palladium lost 0.4% at $1,204.25.