Gold fell on Monday as a firmer U.S. dollar weighed on bullion. Traders balanced hopes for a Russia-Ukraine energy truce against renewed Middle East attacks that threatened to intensify inflation pressures.
Gold fell 0.5% to $4,174.23 an ounce at 05:01 ET (09:01 GMT) on Monday. Gold Futures declined 0.4% to $4,198.05, while the U.S. dollar index rose 0.1% to 102.31.
The metal had gained 1.3% last week, but it has still lost about a fifth of its value since the U.S.-Iran war erupted in late February.
Energy truce claim meets fresh Middle East attacks
Trump said an energy truce between Russia and Ukraine had taken effect immediately, raising hopes of some relief for global fuel supplies. He had earlier urged Ukrainian President Volodymyr Zelenskyy to halt attacks on Russian oil refineries and said Moscow had agreed to release diesel into global markets.
However, Houthi rebels attacked King Khalid International Airport in Riyadh on Sunday, a day after a strike on the facility killed 12 people and injured more than 300. The Houthis described their attacks as retaliation for what they called Saudi aggression.
The violence has raised concerns that the conflict could spread further across the region, potentially pushing energy prices higher and strengthening the case for tighter monetary policy. Higher energy costs and the threat of broader inflation have prompted some central banks to raise interest rates, a headwind for gold because it does not generate interest income.
ANZ points to investment and central bank demand
ANZ analysts said gold's recent performance has been supported by rising investment demand, with inflows into gold-backed exchange-traded funds reaching a four-year high, according to Bloomberg data. Central banks have also continued to increase their gold holdings.
The People's Bank of China added 740,000 ounces to its reserves in September, extending its buying streak to 23 consecutive months.
However, ANZ cautioned that inflation risks could limit further gains if they prompt the Federal Reserve to tighten policy further.
Source: Investing.com
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