Gold and silver prices climbed by more than 2 per cent on the Multi Commodity Exchange (MCX) on Monday, following a rally in global bullion prices, after US and Iran reached an initial agreement to end their war, pushing oil prices lower and easing concerns about inflation and higher interest rates.Gold trade said that consumers who were holding their purchase plan due to the uncertainty in the market are expected to return soon. They expect investment demand in the form of coins and bars to see an uptick as the prices start surging ahead.In Mumbai’s spot market, gold price inched up by 2.04 per cent to Rs 1.5 lakh per 10 gm on Monday, while silver prices went up by 3.71 per cent to Rs 2.51 lakh per kg.Gold prices had been under pressure since the beginning of the US-Iran even though the precious metal historically has played the role of a safe haven asset during any geopolitical tension.Analysts said that this war has been bearish for gold for two main reasons. First, it began with the gold market near an overbought extreme and with gold very expensive relative to almost everything. Second, it has created financial stress in parts of the world, including India and the countries around the Persian Gulf, where a lot of gold is held as a store of value or for insurance purposes. This financial stress has, in turn, prompted the selling of gold.Sentiment around the precious metals improved after U.S. and Iranian officials announced an interim peace framework that would halt hostilities, lift the U.S. blockade on Iran, and reopen the Strait of Hormuz, a vital route for global energy supplies.Reports suggest Iran could receive significant reconstruction funding, partial access to frozen assets, and relief from sanctions on its oil exports, while Hormuz is expected to reopen without tolls. “The prospect of increased oil supplies pushed crude prices lower, easing fears of energy-driven inflation that had dominated markets for months. As a result, expectations for further Federal Reserve tightening moderated, with markets now pricing roughly a 49% probability of a rate hike by December compared to nearly 70% a week ago. Lower rate expectations, softer treasury yields, and a weaker dollar supported bullion prices,” explained Manav Modi, research analyst at Motilal Oswal Financial Services.Focus this week will be on the Federal Reserve policy meeting, updated economic projections, and policy decisions from the Bank of Japan and Bank of England, which could provide further direction for precious metals and global financial markets.Kumar Jain, owner of UT Zaveri, a century- old showroom in Zaveri Bazaar said that his shop has witnessed good footfalls since the morning for jewellery purchase. “There is a glimmer of hope among the customers that the economic uncertainties will wane once the US-Iran deal is signed.”