Spot gold rose 0.3% to settle at $4,055.25 an ounce on Monday as a slide in oil prices offset a clouded Federal Reserve rate outlook. Traders weighed conflicting signals on Iran diplomacy while waiting on the U.S. jobs report for further rate cues.
Gold prices made marginal gains on Monday as traders were heartened by a slide in oil, but stayed cautious ahead of key U.S. employment data due later in the week. Spot gold rose 0.3% to settle at $4,055.25 an ounce, while gold futures climbed 0.1% to settle at $4,111.05 an ounce.
Iran diplomacy clouds the outlook
Sentiment shifted after President Donald Trump said he had called off a planned strike on Iran and that negotiations were set to begin Monday. Yet Iran's Foreign Ministry said no talks with Washington were currently underway, fueling uncertainty over a deal and the full reopening of the Strait of Hormuz.
The U.S. dollar was little changed, after media reports said authorities had intervened in currency markets to support the Japanese yen. According to ING: "negotiation, rather than military firepower, is Washington's preferred method of engaging with Iran".
Fed's mixed signals keep gold capped
Market participants were still digesting the Federal Reserve's decision last week to leave interest rates unchanged. It was not a unanimous vote, as three regional central bank presidents preferred to raise rates by 25 basis points instead. New Fed Chair Kevin Warsh, at the post-decision press conference, failed to convince traders that the central bank was on top of combating inflation.
This hawkish undertone continues to act as a structural ceiling for gold. On the daily chart, spot gold holds below all major moving averages, with the 50-day, 100-day, and 200-day SMAs lining up as layered resistance overhead, a setup that suggests rallies remain capped for now. Elevated rates could weigh further on non-yielding assets such as gold.
Traders are now looking ahead to the release of the U.S. jobs report for July, this week's key data point for rate cues.
Source: Commodities & Futures News
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