Gold prices recovered above $4,100 per ounce during today’s trading session after facing selling pressure late last week following stronger than expected US employment data, which renewed investor expectations of further interest rate increases. Spot gold climbed to $4,123, while US gold futures advanced to $4,132, supported by a decline in the US Dollar Index to 102.14 points. The recovery followed Friday’s losses, when gold traded near $4,070 per ounce.
The previous pressure on gold came after the US economy added 165,000 jobs in October, exceeding market expectations, alongside a decline in the unemployment rate and an improvement in consumer confidence to its highest level in three months. These figures provide the Federal Reserve with additional justification to maintain a restrictive monetary policy, particularly as inflation remains a concern amid elevated energy prices. Higher interest rates increase the opportunity cost of holding gold compared with interest bearing assets, explaining the metal’s sensitivity to employment figures and movements in US Treasury yields.
Gold had previously recorded gains following the US midterm elections, recovering above $4,000 as Treasury yields and oil prices declined. Investors increasingly expected that Democratic control of both chambers of Congress would encourage efforts to end the conflict with Iran. Expectations of tighter constraints on government spending and borrowing also helped ease some concerns surrounding the US fiscal outlook. Nevertheless, gold remains approximately 20% below the levels recorded before the outbreak of the conflict between the United States and Iran in late February, reflecting the substantial losses experienced by the market over recent months.
From a price action perspective, holding above $4,100 remains important for sustaining the latest recovery after gold rebounded from the $4,070 area. Meanwhile, the mixed movements seen last week highlight the market’s continued sensitivity to economic and political developments. ANZ analysts noted that gold experienced heightened volatility amid uncertainty surrounding the US economy and political conditions, as stronger employment figures erased part of the gains recorded following the elections.
The recovery extended to other precious metals, with silver climbing to $52.7 per ounce and platinum advancing to $1,557. Spot palladium rose to $1,048, while palladium futures reached $1,045. These movements reflected improved demand for precious metals during the session, despite persistent pressure from expectations surrounding US interest rates.
Market attention is now turning to Tuesday’s US inflation figures, which could provide the next major indication of the interest rate outlook ahead of the Federal Reserve’s December meeting. Investors are also awaiting another employment report and additional inflation indicators before the meeting, amid expectations of further monetary tightening. Higher than expected inflation readings could support the US dollar and Treasury yields, potentially limiting gold’s gains, while softer inflation data may provide the metal with an opportunity to extend its recovery.
Turning to oil markets, prices moved higher after an initially negative start driven by remarks from US President Donald Trump suggesting a reduced likelihood of further military strikes against Iran. Prices subsequently recovered some of their losses following reports that no vessels had passed through the Strait of Hormuz on Sunday. January Brent crude futures traded around $98.35 per barrel, while West Texas Intermediate crude rose to $90.83, as concerns persisted over maritime security and the impact of regional instability on energy supplies.
The recovery followed losses exceeding 16% during the previous week, encouraging some traders to buy at lower price levels. Oil’s earlier decline had accelerated as expectations grew that the conflict between the United States and Iran could be contained following Democratic control of both chambers of Congress. Investors anticipated that the new congressional majority could pressure the US administration to bring the military confrontation to an end. Trump’s comments suggesting that additional strikes were unlikely also helped reduce concerns about a wider military escalation.
However, developments on the ground continue to disrupt shipping activity in the Gulf. Iran announced that navigational assistance systems in the southern Strait of Hormuz had been destroyed, preventing vessels from using routes that Tehran described as unauthorized. These developments coincided with reports that three oil tankers had caught fire over the weekend, along with an Iranian announcement that another tanker had struck naval mines. Such incidents have increased concerns among shipping companies and market participants regarding the stability of crude oil transportation.
On the political front, Trump indicated during a Sunday interview with CNN that further US military strikes against Iran were highly unlikely, provided that progress was made in negotiations with Tehran. At the same time, Washington launched an operation targeting Iran’s trade in advanced weapons and sanctioned materials through its land borders and the Caspian Sea. Trump announced the activation of Task Force Iron Gate, stating that the new measures, combined with the US naval blockade, were imposing extensive restrictions on Iranian trade flows.
These developments follow nearly nine months of diplomatic deadlock between Washington and Tehran, accompanied by recurring disruptions to oil supplies from the Middle East. Meanwhile, hostilities between Saudi Arabia and the Iran backed Houthi group in Yemen have continued, with reports suggesting an attempted attack on Saudi Aramco’s corporate headquarters in Riyadh on Sunday. The group had previously declared a naval blockade against Saudi Arabia, while both sides have exchanged attacks since at least mid 2026.
Shipping activity through the Strait of Hormuz remains the most significant factor influencing oil prices in the near term, particularly as the market continues to price in the risk of supply disruptions. Continued restrictions on tanker movements could provide support for crude prices, while progress in negotiations between Washington and Tehran may place renewed pressure on the market if it leads to reduced tensions and the restoration of normal shipping activity. Under these conditions, the sustainability of the current oil price recovery will depend more heavily on actual supply developments than on diplomatic statements alone.
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