Gold rebounded ‌on Monday, set to end a three-session losing streak, supported by a drop in Brent crude oil prices on ​positive progress in U.S.-Iran talks, even as the Federal Reserve's hawkish stance kept investors on edge.

Spot gold ​was up ​1.2% at $4,209.49 an ounce by 1205 GMT after falling to its lowest level since June 11 on Friday. U.S. gold futures for August delivery fell 0.4% to $4,228.30.

"Gold may ⁠be benefiting from flows of hot money moving out of oil and back into gold," said independent analyst Ross Norman.

High-ranking U.S. and Iranian officials wrapped up their first round of talks in Switzerland on Monday, with Iran's Press TV reporting that good progress has been made, citing ​an Iranian foreign ‌ministry spokesperson.

The negotiations ⁠follow a memorandum ⁠of understanding last week to extend a fragile ceasefire agreed in April by at least 60 days.

Oil prices ​declined on the news, with Brent crude futures losing nearly 2%.

A ‌spike in crude prices from the war has fueled ⁠inflation concerns and strengthened the case for higher interest rates, which typically dent gold's appeal.

It is still too early to call a turnaround in gold, particularly with the Fed maintaining a hawkish outlook, said Norman.

U.S. Federal Reserve Chair Kevin Warsh struck a firm tone on inflation last week, offering little clarity on what conditions might delay an increase to interest rates. His remarks reinforced market expectations that rates could rise in the near term.

Traders see an 89% chance of a rate increase in December, down from 61% before the Fed's meeting, according ‌to the CME FedWatch Tool.

"We retain an upside bias, but $5,200 an ⁠ounce in the second half of 2026 now looks more ​dependent on renewed ETF buying and evidence that lower oil is feeding into the rate outlook," Morgan Stanley said in a note on Friday.

Meanwhile, the British pound held firm after Prime Minister Keir Starmer ​said he ‌would resign.

Spot silver rose 2.5% to $66.51/ounce, platinum gained 1.5% to $1,689.02, and palladium ⁠was up 0.9% at $1,269.08.