Gold rose to $4,389.17 an ounce on Monday, building on last week's surge after soft U.S. jobs data reshaped Federal Reserve rate expectations. Gains were capped by a jump in oil prices tied to uncertainty over Iran and the Strait of Hormuz, with traders now awaiting this week's U.S. inflation reports for further direction.
Gold added 1.1% to $4,389.17 an ounce on Monday at 16:49 ET, while gold futures climbed 1.1% to $4,448.55 an ounce. The moves extended a sharp weekly advance, in which spot gold surged 7.5% and futures jumped 7.1%.
Soft jobs data eases rate-hike bets
Bullion had already risen more than 2% on Friday after data showed the first monthly decline in U.S. nonfarm payrolls since February, driven largely by a drop in local government education jobs. Payrolls for May and June were also revised down by a combined 103k.
Traders responded by paring bets on a Fed rate hike in September, since higher rates tend to weigh on non-yielding assets such as gold and strengthen the dollar, making the metal costlier for foreign buyers. John Murillo, chief business officer at B2BROKER, said: "It would be fair to say that everything now depends on the core inflation results." He added that gold could trade closer to $4,400 in that scenario, with a move to $4,500 needing stronger jobs data.
Attention now turns to this week's U.S. inflation data for further cues on Fed policy. The July consumer price index is due Wednesday, the producer price index Thursday, and July retail sales Friday. UBS has kept a $5,000/oz price target for gold, citing falling real yields as the Fed eventually eases, dollar softness tied to U.S. fiscal and external deficits, and steady central bank buying as a price floor, factors it expects to drive gold higher through 2027.
Oil jumps as Iran hardens stance on Hormuz
Oil prices rose nearly 5% on Monday after Iran ruled out direct talks with the U.S. and said a full reopening of the Strait of Hormuz depends on Washington meeting certain conditions. Iran-backed Houthi attacks on Saudi energy infrastructure added to supply concerns, and traders moved into the safe-haven dollar.
Crude had slumped last week on assertions from U.S. officials, including President Donald Trump, that talks with Iran were ongoing, but losses eased late in the week as Tehran kept rejecting Washington's negotiation claims. Iran ruled out direct talks with the U.S. for now, citing alleged violations of the interim peace agreement reached in June, and repeated its conditions for fully reopening Hormuz: an end to the U.S. naval blockade, the removal of sanctions, and compensation for war damage. Trump said Monday that Iran was seeking compensation for damage from the U.S.-Israeli assault on Tehran that began toward the end of February, and that he would also seek compensation from Iran in future negotiations.
Source: Commodities & Futures News
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