Gold gains on weaker oil, dollar; US inflation data in focus

Gold rose on Monday, supported by a ‌softer dollar and lower oil prices, as investors awaited key US inflation data this week for clues on the Federal Reserve’s next policy move.

Spot gold was up 0.3% at $4,206.01 per ounce, as ​of 0253 GMT, after hitting its highest since October 2 earlier in the ​day. US gold futures for December delivery gained 0.3% to $4,230.40.

“Softer oil ⁠prices on the back of Trump’s reported energy ceasefire between Russia and Ukraine, combined ​with a more subdued dollar, have given gold a window of opportunity to the ​upside to start the week,” said Tim Waterer, chief market analyst at KCM Trade.

“As oil eases, it takes some of the immediate inflation and interest rate anxiety out of the market, which helps ​gold from a yield perspective.”

US President Donald Trump made a surprise announcement of an energy ​ceasefire between Russia and Ukraine on Sunday that he said was “effective immediately”, but Ukrainian leader Volodymyr ‌Zelenskiy ⁠said he was still waiting to see details of the deal. Oil prices fell on expectations of more Russian supplies.

The US dollar was muted, making greenback-priced bullion more affordable for buyers holding other currencies.

While gold is typically seen as a hedge against inflation, higher ​interest rates tend to ​diminish non-yielding bullion’s ⁠appeal.

Markets are now awaiting the US Consumer Price Index (CPI) report on Wednesday, followed by the Producer Price Index (PPI) and retail sales ​data on Thursday.

Traders see a 17% chance of a rate hike ​in October ⁠and an 86% probability of an increase by December, according to CME’s FedWatch tool.

Meanwhile, US consumer sentiment slumped further in early October as the rising cost of living because of ⁠the Middle ​East conflict soured households’ views of the economy.

Among ​other metals, spot silver rose 0.5% to $61.12 per ounce, platinum gained 1% to $1,704.70 and palladium climbed 1.2% to $1,161.81.