European shares opened on ‌Monday at their highest levels in more than two months, buoyed by signs that Iran and the ​United States were negotiating an end to their conflict, easing concerns about inflation and a global economic slowdown.Oil fell while precious metals rose as senior US officials gave further, positive signals on progress toward a deal with Iran to reopen the Strait of Hormuz.Brent lost as much as 6.2 per cent to $97.10 a barrel, while West Texas Intermediate was near $91. US secretary of state Marco Rubio struck a cautiously upbeat tone on Monday, saying the US was going to give diplomacy every chance. “We thought we might have some news last night,” he said in New Delhi. “Maybe today.”The pan-European Stoxx 600 was up 0.61 per cent at 628.93 points, as of 0712 ​GMT, trading just shy of a record high touched in late February, just before the Middle ⁠East war erupted.Most sectors traded higher, led by banks with a 1.7 per cent jump, ‌while ‌regional ​airlines such as Lufthansa and Air France KLM gained 4.2 per cent and 9 per cent.One-fifth of the world’s crude oil and natural gas passes through the strategic waterway and is also key for energy-dependent Europe. The Stoxx 600 has lagged global peers on worries that higher crude prices could fan inflation pressures in the region.Gold prices rose more than 1 per cent on Monday, as optimism for a breakthrough ​in negotiations weakened the dollar and eased oil prices, which softened the inflation outlook. Spot gold was up 1.1 per cent at $4,559.07 per ounce, as of 0736 GMT. US gold futures for June delivery ​gained 0.8 per cent to $4,559.80. While US president Donald Trump has warned that he was in no hurry to ⁠finalise a deal with Iran, investors seem to rely more on his Saturday ‌statement ‌that ​Washington and Iran had “largely negotiated” a memorandum of understanding on a peace deal that would reopen the Strait of Hormuz.“Trump ⁠has been raising market hopes ​for some sort of deal with Iran, which ​could lead to the reopening of the Strait of Hormuz. That prospect has ‌weighed on oil prices and, by extension, ​given gold a welcome lift from an inflation perspective,” said Tim Waterer, chief ⁠market analyst at KCM Trade. “The two sides may be closer on a ceasefire and Strait of Hormuz reopening framework, but still far apart on the harder issues,” said Charu Chanana, chief investment strategist at Saxo Markets in Singapore, citing sanctions and the nuclear programme. “Oil has priced in relief, but not a durable resolution.”The US ⁠will either have ​a good agreement with Iran or deal with the country “another way”, Rubio said on Monday.The dollar was around its lowest levels in a week, making greenback-priced bullion more affordable for holders of other currencies.Elevated crude can fuel inflation and keep interest rates higher for longer. While gold is seen ‌as an inflation hedge, higher ⁠rates tend to weigh on the non-yielding metal. Kevin Warsh was sworn in as chairman of the US Federal Reserve on Friday at a ‌pivotal moment for the US economy, where surging gasoline prices linked to the Iran war fuel ​inflation and erode consumer sentiment. Spot silver climbed 3.1 per cent to $77.79 ​per ounce, platinum rose 2.3 per cent to $1,966.59, and palladium was up 2.7 per cent at $1,384.70. – Reuters / Bloomberg