Gold prices steadied on Monday as
dip-buying helped the market recover from earlier losses, after
the metal slipped to a more than one-month low amid rising
oil-driven inflation concerns and expectations that interest
rates will stay higher for longer.
Spot gold was steady at $4,540.36 per ounce, as of
0241 GMT, after hitting its lowest level since March 30 earlier
in the session.
US gold futures for June delivery lost 0.4 per cent to
$4,543.70.
“We’re seeing a bit of bounce right now due to profit-taking
activities, given the fact that gold itself still continues to
remain trapped in this complex sideways range configuration,”
said Kelvin Wong, a senior market analyst at OANDA.
Gold fell to its lowest since March 30 earlier in the
session as ongoing tensions in the Middle East boosted oil
prices, fuelling concerns around inflation and higher-for-longer
interest rates.
A drone strike caused a fire at a nuclear power plant in the
United Arab Emirates, officials there said on Sunday.
Saudi Arabia, meanwhile, reported intercepting three drones,
as US President Donald Trump warned that Iran must act “fast”
after efforts to end the U.S.-Israeli war appeared to have
stalled.
Oil prices extended gains on Monday to hit a two-week high.
Elevated oil prices have sparked concerns about inflation.
Central banks tend to hike interest rates during periods of
inflation, which in turn dims the appeal of non-yielding
bullion.
Markets are increasingly pricing in a US Federal Reserve
rate hike before year-end, with a 50 per cent chance of a move by
December, according to CME Group’s FedWatch tool.
Investors now await minutes of the Fed’s April meeting, due
to be released this week, for clues on the central bank’s
monetary policy direction.
Meanwhile, India has curbed imports of silver in nearly all
forms with immediate effect, according to a government order
issued on Saturday, as the world’s biggest consumer of the metal
seeks to rein in shipments and ease pressure on the rupee.
Spot silver fell 0.8 per cent to $75.38 per ounce, platinum
lost 0.1 per cent to $1,972.10, and palladium dropped 1.3 per cent
at $1,394.75.