Gold rises as oil slide eases inflation fears, Trump signals Iran talks

Gold prices surged on Tuesday as oil prices fell over 9% in four days, easing worries about inflation and the likelihood of additional Federal Reserve rate increases. The weaker dollar and renewed hopes for U.S.-Iran talks also bolstered the precious metal. Despite the Federal Reserve's divided stance on interest rates, gold moved higher, with XAU/USD up 0.4% to $4,359.40 an ounce.

Gold Futures gained 0.3% to $4,396.85. Silver and platinum also experienced gains, with XAG/USD rising 0.6% to $66.43 and XPT/USD growing 0.3% to $1,809.03. The US Dollar Index fell 0.03% to 100.39. The rebound came after gold suffered its biggest drop in a week on Monday, following a week of energy price declines that reduced inflation pressure.

Lower energy costs also lowered expectations for further Fed tightening. Gold typically benefits when interest rate expectations fall, as the precious metal does not generate income. The move follows renewed diplomatic signals regarding the U.S.-Iran conflict, with President Donald Trump expected to meet Iranian President Masoud Pezeshkian at the United Nations General Assembly in New York later in the day.

The diplomatic focus comes after months of conflict and disruption in Middle East energy flows, which could further ease inflation concerns. Investors are also monitoring Federal Reserve officials' comments following the central bank's unanimous 25 basis point rate increase last week, the first hike in three years. Fed officials, including Chicago Fed President Austan Goolsbee and St. Louis Fed President Alberto Musalem, have expressed concerns about ignoring persistent supply shocks that could lead to economic hardship.

Despite near-term pressures, gold demand remains strong, with 50 tonnes of the metal flowing into gold-backed ETFs in September, pushing inflows into a third consecutive month of gains.