Listen to the article: Audio text automatically generated by an automated system

0:00

2 minutes to read

Gold prices steadied on Monday as investors assessed the escalation in the Middle East that pushed oil prices higher, while another Federal Reserve official indicated that raising interest rates may be necessary to curb price pressures.

Spot gold was at $4,018.90 an ounce by 04:55 GMT. U.S. gold futures for August delivery rose 0.1% to $4,023.10, according to Reuters.

Oil prices jumped more than 3% after U.S. forces launched attacks on Iran for the ninth consecutive day on Monday, with the confirmed death toll of U.S. military personnel in the renewed fighting rising to three, and concerns growing over navigation through the Strait of Hormuz.

Brian Lan, managing director at Gold Silver Central, said: "The war is still ongoing, with a focus on rising oil prices that could lead to higher inflation, which keeps gold under pressure."

He added, however, that "$4,000 is an important level, showing support for the metal when it falls below this level."

Rising oil prices fuel inflation fears and expectations of keeping interest rates higher for longer.

Gold is usually considered a hedge against inflation, but higher interest rates increase the opportunity cost of holding the non-yielding asset.

Cleveland Federal Reserve President Beth Hammack joined a growing number of policymakers who believe that interest rates may need to be raised to combat persistent inflation, paving the way for a heated debate at the Fed's next meeting on July 29.

According to the CME FedWatch tool, traders currently see an 82% probability of a rate hike in December, up from 73% last week.

Among other precious metals, spot silver rose 1.7% to $56.87 an ounce, platinum was steady at $1,592.34, and palladium gained 0.1% to $1,249.25.

Advertisement

Advertisement

Read also

Pharaohs' Genes Open New Battle Over Ancient Egypt's History: Project to analyze 200 mummies and 100,000 Egyptians may redraw origins of Egyptians and ignite debate about... Economic stories

Gas Price at Minimum: Sudden Drop in Nitrogen Fertilizer Prices in Egypt - Ton falls to 21,000 pounds in government auctions - Breaking News

Fastest Growing Threat to Planes Might Be in Your Pocket: Rising cases of mobile phones, power banks, and vaping devices catching fire... Economic stories