Gold prices advanced on Monday morning, as a potential U.S.-Iran peace deal has dampened inflation fears and weakened the U.S. dollar. Spot gold prices gained 1.2% to around $4,560 per ounce at 4:09 a.m. ET.Deal HopesPresident Donald Trump on Saturday said that the United States, Iran and several Middle Eastern nations are nearing a peace agreement that could reopen the Strait of Hormuz, a critical global oil shipping route, after about three months of closure. The hopes pushed oil prices lower, easing concerns about inflationary pressure on the global economy.WTI Crude (July) dropped 4.4% to $92.34 per barrel at 4:25 a.m. ET.The ICE U.S. Dollar Index moved lower by 0.2% at 4:14. a.m. ET. This drop can make gold cheaper for buyers using other currencies.Rate Hike Bets Limits GainsWhile easing inflationary pressure would benefit gold, the fear of persistently high interest rates is limiting demand for the metal.Inflation fears have compelled policymakers to consider a rate hike rather than cuts, according to the minutes from the April 28-29 meeting. A majority of officials indicated support for policy tightening if inflation continues running persistently above 2%.A Quick Look At ETFsSPDR Gold Shares