Gold Prices Hold Near Seven-Week High as Markets Await U.S. Inflation Data

Gold prices remained largely steady on Monday, hovering near a seven-week high as investors assessed Middle East geopolitical risks and looked ahead to key U.S. inflation data that could influence the Federal Reserve’s interest-rate outlook.

Spot gold slipped 0.1% to $4,336.43 per ounce as of 00:27 ET (04:27 GMT), while U.S. gold futures edged 0.1% lower to $4,395.40. Despite the modest pullback, bullion remained close to the highest level since June 17, reached during Friday’s trading session.

Gold received support after U.S. labor-market data showed the economy unexpectedly lost jobs in July, while employment gains from previous months were revised sharply lower. The weaker jobs report prompted traders to reassess expectations surrounding the Federal Reserve’s September policy meeting.

Futures markets now indicate that the probability of a September Fed rate hike has fallen below 50%, compared with odds above 50% before the latest employment figures. A less restrictive monetary policy environment can benefit gold because lower interest rates reduce the opportunity cost of holding non-yielding assets such as bullion.

Attention is now shifting toward U.S. consumer price index data scheduled for Wednesday, followed by producer price figures on Thursday. Softer-than-expected U.S. inflation readings could further strengthen expectations that the Fed will adopt a more accommodative interest-rate stance, potentially providing additional support for gold prices.

Middle East uncertainty is also maintaining demand for safe-haven assets. Iran said it was approaching a final agreement with Oman on new shipping lanes through the Strait of Hormuz, although Washington would still need to satisfy several conditions before the strategic waterway could reopen.

While geopolitical tensions typically support gold demand, rising oil prices could complicate the outlook. Higher energy costs may increase inflationary pressures, potentially limiting the Federal Reserve’s ability to ease monetary policy.

Elsewhere in precious metals, silver prices climbed 0.5% to $63.89 per ounce, while platinum gained 0.5% to $1,757.50. Investors are likely to remain focused on U.S. inflation data, Fed rate expectations and developments in the Middle East for the next major direction in gold prices.