Gold prices rose on Monday, supported by a weaker US dollar, while falling oil prices following easing tensions in the Middle East strengthened demand for the precious metal. Investors remained cautious ahead of a busy week of US economic data that could influence the direction of Federal Reserve monetary policy.
Spot gold gained 0.5% to $4,062.41 per ounce, while gold futures rose 0.3% to $4,117.35 per ounce. Silver advanced 0.6% to $57.98 per ounce, while platinum increased 0.3% to $1,650.18 per ounce.
Gold received support after US President Donald Trump said Iran and several Middle Eastern countries had requested more time to complete an agreement aimed at reopening the Strait of Hormuz and ending the Iranian nuclear threat. The announcement prompted markets to reduce expectations of an imminent escalation in the region.
The comments sent oil prices down by more than $5 per barrel at the beginning of Asian trading. The decline eased concerns that prolonged supply disruptions could keep inflation elevated and reduced pressure for tighter monetary policy.
At the same time, the US Dollar Index continued to weaken, remaining below the 100 level at around 99.7. A softer dollar made gold more attractive to buyers using other currencies and provided additional support for prices.
Despite the gains, markets remained cautious after three Federal Reserve officials who opposed the latest monetary policy decision repeated that inflation was still too high. They argued that an immediate interest rate increase was necessary to protect the central bank’s credibility in controlling inflation.
Higher interest rates usually place pressure on gold because the metal does not generate regular income. This increases the cost of holding bullion compared with assets that provide returns.
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