Bullion slips on profit-taking after strong jobs-driven rally, while markets focus on upcoming US CPI and PPI data and continued uncertainty over the Strait of Hormuz
Dubai: Gold prices edged lower on Monday as investors locked in profits after the precious metal reached a seven-week high in the previous session, while attention shifted to upcoming US inflation data for signals on the Federal Reserve’s interest-rate outlook.
Spot gold fell 0.3% to $4,330.46 per ounce by 0443 GMT, after reaching its highest level since 17 June on Friday following weaker-than-expected US employment data.
US gold futures were down 0.2% at $4,390.60 per ounce.
“Gold is edging slightly lower as it succumbs to some profit-taking following last week’s strong NFP-inspired gains,” said Tim Waterer, Chief Market Analyst at KCM Trade.
“This looks like a natural stabilisation rather than a meaningful shift in sentiment. I expect gold to remain supported above the $4,300 level in the near term.”
Focus on inflation data
Gold rallied last week after US labour market data showed the economy unexpectedly lost jobs in July, while employment figures for the previous two months were revised sharply lower.
The weaker jobs report prompted futures markets to reassess expectations for Federal Reserve policy, reducing the likelihood of an interest-rate increase at the Federal Open Market Committee meeting scheduled for 15-16 September.
Lower interest rates generally support gold prices because the metal does not offer interest income, making it more attractive relative to yield-bearing assets.
Investors are now awaiting key US economic indicators this week, including:
- Consumer Price Index (CPI) on Wednesday
- Producer Price Index (PPI) on Thursday
Waterer said softer inflation readings could strengthen expectations that the Fed will keep rates unchanged, providing further support for bullion prices.
“Soft readings would strengthen the case for a rate hold and clear a path for further upside in gold,” he said.
Middle East tensions remain in focus
Markets are also monitoring developments in the Middle East.
Iran said it was nearing a final agreement with Oman on new shipping lanes through the Strait of Hormuz, but reiterated that several US conditions must be met before the strategic waterway is reopened.
Waterer noted that regional tensions continue to influence commodity markets.
“Middle East uncertainty remains a lingering risk factor, as any renewed escalation that drives oil prices up could quickly pressure the metal,” he said.
Other precious metals
Elsewhere in the precious metals market:
- Spot silver rose 0.3% to $63.77 per ounce
- Platinum gained 0.2% to $1,748.80 per ounce
- Palladium fell 1% to $1,364.55 per ounce
Source: Emirates 24|7