NEW YORK: 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 US Federal Reserve’s policy path.
Spot gold fell 0.3 percent to USD4,029.84 per ounce by 10:12 a.m EDT (1412 GMT), while U.S gold futures for August delivery dropped 0.5 percent to USD4,029.00.
“Gold has been stuck in a trading range for more than a month now roughly between USD4000-USD4200. 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 percent 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 percent last month after fighting between the US 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 US 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 fell 0.8 percent to USD57.18 per ounce, platinum slid 1.6 percent to USD1,616.42 and palladium dropped 1.8 percent to USD1,251.16.
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