Gold was steady as traders weighed the competing impacts of cooling US economic data and energy-led inflation pressure on the Federal Reserve’s interest-rate path.
Bullion was trading around US$4,370 an ounce, after ending the previous week almost 1% higher. Latest US data showed declines in both consumer sentiment and retail sales, helping to ease fears of an imminent rate hike, which is typically a headwind for non-yielding bullion.
However, volatility continued to shroud the global energy supply outlook, keeping the risk of monetary tightening alive. More ships came under attack in the Strait of Hormuz late last week, while the US said it was preparing to impose new measures aimed at crippling Iran’s economy.
Even so, vessels are exiting the strait, often with satellite transponders turned off to avoid detection. Iran and Oman appear to be edging closer to a deal on how the critical waterway should be managed, although the US isn’t party to those talks.
Looking ahead, the minutes of the Fed’s July policy meeting are due for release on Wednesday, providing some clarity on rate considerations.
Gold’s recovery above the key US$4,000-an-ounce threshold has been driven by renewed investor appetite and an increase in central bank purchases, notably from China. Gains last week took the metal above its 100-day moving average for the first time since April, and it continues to hover near that level.
Spot gold was little changed at US$4,376 an ounce at 7:24am in Singapore. Silver was 0.6% higher at US$65.08 an ounce, after gaining almost 2% last week. Platinum and palladium advanced. The Bloomberg Dollar Spot Index, a gauge of the US currency, was down 0.1%.
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