Among other metals, spot silver XAG= rose 2.7% to $59.74 per ounce, platinum XPT= climbed 3.5% to $1,643.70 and palladium XPD= gained 3.4% to $1,285.00.
Oil and dollar moves support metals
The U.S. dollar index .DXY fell 0.3%, making greenback-priced metals more affordable for other currency holders.
Iran will halt its own attacks as long as the United States does the same, a senior Iranian official told Reuters on Sunday. The United States pressed pause on its bombing campaign after President Donald Trump's advisers told him they were running out of targets and expressed worries about depleting the U.S. arsenal.
Oil prices were down more than 6% on the day.
Since the conflict began earlier this year, oil prices have gained, driving inflation concerns and expectations of central bank rate hikes.
That has weighed on gold, which, despite traditionally being seen as an inflation hedge, becomes less attractive as higher interest rates raise the opportunity cost of holding the non-yielding metal.
Gold rises as Middle East tensions ease
Gold prices rose more than 1% on Monday as a pause in Middle East hostilities pushed oil prices lower, eased some inflation worries and reduced expectations for near-term U.S. interest rate increases before a Federal Reserve meeting this week.
Spot gold XAU= climbed 1.3% to $4,103.59 per ounce by 0723 GMT. U.S. gold futures GCcv1 gained 0.9% to $4,106.00.
"Gold is a clear beneficiary today of the dual price action in oil and the U.S. dollar," said Tim Waterer, chief market analyst at KCM Trade.
Fed meeting and technical levels in focus
"Longer term, I remain constructively bullish on gold. Gold's immediate fate is closely tied to where oil prices head from here and the path higher is likely to remain volatile and heavily influenced by geopolitical headlines until a more durable peace takes hold," Waterer said.
Focus is also on the Fed meeting on July 28-29, where market participants widely expect rates to be left unchanged. Traders are pricing in a 74% chance of a hike in September, according to the CME FedWatch Tool.
Spot gold may retest resistance at $4,117, as it managed to stabilise around a key support at $4,038 and bounce strongly, Reuters technical analyst Wang Tao said.
GLD•
