Gold edged lower on Monday as uncertainty over the war in the Middle East and concerns over rising inflation lingered, with markets also watching a slew of job reports this week to gauge the U.S. Federal Reserve’s policy path.
Spot gold fell 0.1% to $4,037.01 per ounce by 12:37 p.m. EDT (1637 GMT), while U.S gold futures for August delivery dropped 0.3% to $4,035.80.
“Gold has been stuck in a trading range for more than a month now roughly between $4,000-$4,200. Providing support is the fact that the market could be expecting a resurgence in inflation, especially in July when fresh data will likely reverse much of June’s decline,” Marex analyst Edward Meir said.
Three Fed officials who dissented at last week’s policy meeting in favour of a rate hike said on Friday that delaying higher borrowing costs could keep inflation above the Fed’s 2% target. New York Fed President John Williams said the central bank was ready to raise rates if inflation pressures did not ease.
Brent futures jumped more than 20% last month after fighting between the U.S. and Iran resumed and attacks on several tankers around Oman heightened security concerns.
Higher energy prices reinforce expectations that the Fed will keep interest rates higher for longer to combat inflation, weighing on non-yielding gold.
Iran said on Monday there were no talks under way with the U.S. and no plans for any meetings, contradicting President Donald Trump who had cited talks he said would take place as justification for calling off attacks. Market participants will be closely watching a series of U.S jobs reports this week, including the ADP employment report and the nonfarm payrolls data.
Elsewhere, South Korea’s central bank will buy gold from local producers to diversify its sources of supply and increase its holdings of the precious metal, it said on Monday.
Among other metals, spot silver was steady at $57.64 per ounce, platinum slid 1.2% to $1,622.17, and palladium dropped 1.2% to $1,257.57.
Source: Khaleej Times