Gold Holds Above $4,100 as Oil Plunges on Hopes of US–Iran Diplomacy

Gold held its gains above $4,100 an ounce on Tuesday, trading near $4,139 in early Asian hours after a 1.7% jump on Monday that briefly took it toward $4,140 — its highest level since October 21. The metal is up about 5% over the past week. By Tuesday morning the spot price stood at $4,124.04, up $57.02, or 1.4%, in 24 hours, while silver held near $53.42 after a near-3% rise. The other side of the trade was crude: Brent fell $5.75, or 5.85%, to close at $92.57 a barrel on Monday, and US West Texas Intermediate dropped $3.98, or 4.38%, to $86.85.

The trigger was diplomacy, not data. President Donald Trump signalled that fresh large-scale attacks on Iran were unlikely while negotiations continued, and markets grew more hopeful of a breakthrough in US–Iran talks after last week’s midterm elections handed Democrats control of Congress. That drained the geopolitical risk premium from oil almost overnight — Brent had been trading above $112 a barrel at the start of the month — and eased fears of supply disruption through the Strait of Hormuz. A weaker dollar helped too: the dollar index fell about 0.5% on Monday to around 101.65, making gold cheaper for buyers using other currencies.

The move is a reminder of how gold and oil have pulled in opposite directions for much of this year. Higher energy prices feed inflation and strengthen the case for tighter monetary policy, which is a headwind for a metal that pays no interest. Lower oil does the reverse: it cools inflation fears and takes pressure off the Federal Reserve. That logic also showed up in stocks on Monday — the Dow Jones jumped 2.2%, the S&P 500 climbed 2.4% in its strongest day since April 8, and the Nasdaq added 2.7%, led by chipmakers: the Philadelphia Semiconductor Index surged nearly 7%, AMD jumped more than 13% and Broadcom gained 8.8%. Nvidia was the exception, falling 4.2% to its lowest close since April 7 as investors weighed an investigation into whether chief executive Jensen Huang had been targeted by a foreign intelligence effort.

Why this matters beyond a single day’s prices: gold’s rally has survived the very thing that usually kills it — a Federal Reserve that looks ready to raise rates again. Friday’s jobs report showed 165,000 new jobs in October against roughly 65,000 expected, and markets now price roughly an 80% chance of a December rate rise. For readers tracking how rate expectations move currencies and commodities, our forex section explains why payrolls is usually the most powerful single release for the dollar, and our forex tools include calculators for sizing positions when markets move this fast.

What to watch next: October’s US consumer price index lands on Tuesday at 8:30 a.m. Eastern (6:30 p.m. PKT), the last inflation reading before the Fed’s December 8–9 meeting. Economists expect headline CPI up 0.3% on the month and core up 0.2%, cooling from September’s 0.6% — though this report will carry no year-over-year comparison, because the October 2025 government shutdown left the base data incomplete. A soft number could weaken the case for a December hike and support gold; a hot one would do the opposite, lifting yields and the dollar. Either way, Tuesday’s print decides whether Monday’s calm was the start of a steadier stretch — or just a pause before the next shock. (Not financial advice.)