Gold rose on Monday, supported by a
softer dollar and lower oil prices, as investors awaited key US
inflation data this week for clues on the Federal Reserve’s next
policy move.
Spot gold was up 0.1 per cent at $4,198.19 per ounce, by 0432
GMT, after hitting its highest since October 2 earlier in the
day. US gold futures for December delivery gained 0.1 per cent
to $4,221.80.
“Softer oil prices on the back of Trump’s reported energy
ceasefire between Russia and Ukraine, combined with a more
subdued dollar, have given gold a window of opportunity to the
upside to start the week,” said Tim Waterer, chief market
analyst at KCM Trade.
“As oil eases, it takes some of the immediate inflation and
interest rate anxiety out of the market, which helps gold from a
yield perspective.”
US President Donald Trump made a surprise announcement of an
energy ceasefire between Russia and Ukraine on Sunday that he
said was “effective immediately,” but Ukrainian President
Volodymyr Zelenskiy said he was still waiting to see details of
the deal. Oil prices fell on expectations of more Russian
supplies.
The US dollar was muted, making greenback-priced bullion
more affordable for buyers holding other currencies.
While gold is typically seen as a hedge against inflation,
higher interest rates tend to diminish the non-yielding metal’s
appeal.
Markets are now awaiting the US Consumer Price Index (CPI)
report on Wednesday, followed by the Producer Price Index (PPI)
and retail sales data on Thursday.
Traders see a 17% chance of a rate hike in October and an
86% probability of an increase by December, according to CME’s
FedWatch tool.
Meanwhile, US consumer sentiment slumped further in early
October as the rising cost of living because of the Middle East
conflict soured households’ views of the economy.
Among other metals, spot silver rose 0.4 per cent to $61.02
per ounce, platinum gained 0.8 per cent to $1,701.40 and
palladium climbed 0.8 per cent to $1,156.81.