Gold prices were largely unchanged on Monday after reaching levels not seen in seven weeks during the previous trading session, with market participants monitoring both geopolitical developments and incoming U.S. inflation data for signs on the Federal Reserve's next steps.
Market moves and prices
Spot gold eased 0.1% to $4,336.43 an ounce as of 00:27 ET (04:27 GMT). U.S. Gold Futures similarly slipped about 0.1%, trading at $4,395.40.
Drivers: labour data and Fed expectations
Prices had climbed to their highest since June 17 on Friday after U.S. data indicated the economy unexpectedly lost jobs in July and earlier employment gains for prior months were revised sharply lower. Those softer labour-market figures prompted market participants to scale back expectations for a September Fed rate hike.
Futures markets now assess the probability of a rate increase at the Sept. 15-16 Federal Open Market Committee meeting as below even, compared with a previously greater-than-even chance. Lower expected interest rates tend to support holdings of non-yielding assets such as gold, as the opportunity cost of holding bullion declines when rates fall.
Inflation reads in focus
Investors are awaiting U.S. consumer price data due on Wednesday and producer prices on Thursday. Softer readings in those reports would likely strengthen expectations that Fed policy will be less restrictive, a dynamic that could be constructive for precious metals.
Geopolitical backdrop
Geopolitical uncertainty also kept bullion in focus. Iran said it was nearing a final pact with Oman to create new shipping lanes through the Strait of Hormuz, but added that Washington still needed to meet several conditions before the strategic waterway could be reopened. Such tensions generally provide safe-haven support for gold, although an associated rise in oil prices can complicate the inflation outlook and weigh against expectations for easier Fed policy.
Other precious metals
Silver advanced 0.5% to $63.89 an ounce, while platinum gained 0.5% to $1,757.50.
The balance of incoming U.S. inflation data and developments in the Middle East will likely remain central to short-term price direction for bullion and related markets.