Gold Stabilizes Around $4,160 as U.S. Rate Hike Bets Diminish

SadaNews - Gold stabilized after recording its first weekly gain since May, supported by a decrease in expectations that the U.S. Federal Reserve will raise interest rates.

The precious metal was near $4,155 per ounce after rising more than 2% last week. Weak U.S. jobs data and falling energy prices prompted traders to reduce their bets on tightening monetary policy.

Oil prices fell on Monday as more tankers moved through the Strait of Hormuz, with "OPEC+" signaling an increase in supplies.

Manav Modi, a commodity analyst at "Motilal Oswal Financial Services," stated: "Gains remained limited as inflation continues to be above the Federal Reserve's target, keeping policymakers cautious about easing financial conditions."

He added: "While lower oil prices have alleviated concerns regarding energy-driven inflation, markets continue to monitor broader price pressures from AI-related investment demand and weather-related supply disruptions."

Oil Eases Inflation Pressures on Gold

Crude oil prices, which were a major driver of inflation at the beginning of the U.S.-Iran conflict, recorded their largest quarterly drop since 2020, following increased energy flows through the strait due to a temporary peace agreement between the United States and Iran.

This has eased some inflationary pressures that weighed on non-yielding gold, which tends to perform better when borrowing costs are lower. The "Bloomberg" Dollar Index moved towards recording its first gain in three days on Monday.

Meanwhile, U.S. President Donald Trump and his allies renewed their efforts to reshape the Federal Reserve after the Supreme Court last week blocked an attempt to remove Governor Lisa Cook.

Senior officials and outside allies are actively exploring ways to remove members of the Board of Governors of the central bank in Washington, paving the way for more appointments by the president himself, according to sources familiar with the matter.

Repeated challenges to the independence of the Federal Reserve by the Trump administration have helped propel gold significantly in recent months, amid what is known as the "currency erosion" trade, which is a bet on inflation and rising debt burdens in advanced economies.

Spot gold fell 0.3% to $4,166.47 per ounce at 11:35 AM in Singapore. Silver declined by 0.7% to $61.98 per ounce.

There were minimal changes in platinum and palladium, as the "Bloomberg" spot dollar index, which measures the U.S. currency, rose after shedding 0.3% last week.

Silver Price

Silver prices were also recorded around $61 per ounce.