Gold Market
Gold approached a breakout last week but lost momentum, settling back above $4,200. Sticky inflation, rising bond yields, and a Fed rate hike expectation counterbalanced geopolitical oil supply risks.
The Federal Reserve faces a tough call at its September meeting, but with US debt at $40 trillion and a fragile economy, the outcome may matter little for gold investors in the longer run.
Gold edged lower on Monday as rising oil prices fuelled inflation worries. Traders now price in an 86% probability of a US rate hike, a headwind for the non-yielding metal.
Gold is subdued around $4,330 at the start of a key week for the Federal Reserve. Rate hike expectations and rising bond yields are weighing on the precious metal.
Gold stabilised on Friday after a sharp 2% drop, with traders eyeing US inflation data for clues on the Fed's next move. Key technical support at $4319 is being tested.
Gold prices rose more than 1% on Friday, recovering from recent lows. Strong US inflation data boosted expectations of a Federal Reserve rate hike next week. Indian demand stayed weak while Chinese buying held up.
TD Securities says gold is outperforming other precious metals despite rising energy prices and Fed hike expectations. Near-term CTA selling is possible below key levels, but longer-term support remains robust.
Gold declined 0.9% to $4,360 after US producer prices and surging oil prices fuelled expectations of a hawkish Fed, sending yields and the dollar higher.
Spot gold gained 0.6% to $4,381.32 as a subdued dollar and renewed US-Iran tensions supported prices. Investors now await US inflation data for the next rate move.