Gold prices rose on Monday as investors monitored developments in U.S.-Iran negotiations in Switzerland and assessed the outlook for U.S. monetary policy following the Federal Reserve’s hawkish signals last week.

Spot gold rose 1.1% to $4,204.34 an ounce by 05:28 ET (00:28 GMT), while U.S. Gold Futures climbed 1.2% to $4,222.42.

Bullion has slipped 1.4% last week, and is coming off three straight sessions of losses.

The precious metal found support as Iranian officials reported progress in talks with the United States, helping ease fears of a prolonged disruption to global energy supplies and weighing on crude oil prices.

Iranian foreign minister Abbas Aragchi said "major progress" had been made during the quadrilateral talks in Switzerland, while mediators from Qatar and Pakistan said negotiators had agreed on a roadmap toward a broader agreement.

Technical discussions are set to continue through the week.

Lower oil prices helped reduce inflation concerns, providing support to bullion by tempering expectations that energy-driven price pressures could force the Federal Reserve into a more aggressive tightening cycle.

Brent crude pared earlier gains on Monday after signs of diplomatic progress emerged despite ongoing tensions surrounding the Strait of Hormuz.

Still, gains in gold were limited by expectations that U.S. interest rates could remain elevated.

Markets continue to digest last week’s Federal Reserve meeting, where policymakers maintained a hawkish bias and kept the possibility of further rate increases on the table amid persistent inflation risks.

"While geopolitical risks should continue to provide underlying support, a higher-for-longer US rate environment may limit near-term upside," ING analysts said in a note.

The US Dollar Index held firm near a 13-month high hit last week.

Investors are now awaiting a key reading of the U.S. Personal Consumption Expenditures (PCE) price index later this week for fresh clues on the path of monetary policy.

Among other precious metals, silver prices rose 2.2% to $66.36 per ounce, while platinum gained 11% to $1,683.39/oz.

Benchmark Copper Futures on the London Metal Exchange edged up 0.9% to $13,719.70 a ton, while U.S.Copper Futures traded up 0.6% at $6.37 a pound.