BANGALORE – Gold rose on Sept 29 after hitting a more than seven-week low in the previous session, with investors assessing developments in the Middle East and looking ahead to a raft of US economic data for more clarity on the Federal Reserve’s policy path.
Spot gold rose 0.7 per cent to US$4,143.87 per ounce, as of 0708 GMT, after hitting its lowest level since Aug 5 on Sept 28. US gold futures gained 0.2 per cent to US$4,175.10.
Geopolitical developments will “remain crucial for gold, as continued tensions could keep energy prices and yields elevated, while meaningful progress towards de-escalation could ease pressure,” said Christopher Tahir, senior market strategist at online trading platform Exness.
US and Iranian officials spoke separately with mediators as part of a renewed effort to end seven months of war, according to officials of both countries.
Oil prices rose for a second successive session amid lingering concern over Middle East supply disruption. Elevated oil prices can fuel inflation by increasing costs across the economy, potentially prompting central banks to raise interest rates. Gold tends to struggle in a high-rate environment as investors favour assets that generate interest.
Markets currently see a 70.3 per cent probability of a Fed rate hike in October, according to the CME’s FedWatch Tool, compared with 57.6 per cent a week ago.
Fed Governor Lisa Cook said she expects continued inflationary pressure in the coming months stemming from AI-related demand and higher oil prices, though she stopped short of saying more rate hikes will be needed.
US consumer confidence and job openings data are due later in the day. The week will also see releases on ADP employment, PCE and nonfarm payrolls.
“Persistent price pressures combined with resilient activity would reinforce expectations that central banks need to remain restrictive, keeping yields elevated and leaving gold vulnerable to further losses,” Tahir added.
Among other metals, spot silver fell 0.1 per cent to US$60.91, platinum slipped 1 per cent at US$1,700.40 and palladium lost 0.4 per cent to US$1,209.26.
Citi said investment flows are expected to continue driving the platinum group metals market, as underlying fundamentals remain quiet. REUTERS
