Gold inched lower on Monday, influenced by a stronger dollar and rising oil prices, as investors awaited U.S. President Donald Trump’s decision on a proposed deal to extend the ceasefire with Iran. Spot gold experienced a decline of 0.2%, trading at $4,527.36 per ounce as of 0156, following a rise to a two-week high in the preceding session. U.S. gold futures experienced a decrease of 0.8%, concluding at $4,558.10. The dollar appreciated, leading to a rise in the cost of bullion priced in greenbacks for holders of alternative currencies.
U.S. President Donald Trump indicated on Friday that he would soon reach a conclusion about a proposed agreement to prolong the ceasefire with Iran, despite the apparent ongoing divergence between the two nations on critical issues that have been pivotal to the conflict. Israeli Prime Minister Benjamin Netanyahu has ordered troops to push further into Lebanon amid the ongoing conflict with the Iranian-backed Hezbollah militant group, as he announced on Sunday, despite a ceasefire that was declared over six weeks ago.
Oil prices rose by more than 2% in early trading on Monday, intensifying worries about inflation. Federal Reserve Vice Chair for Supervision Michelle Bowman indicated on Friday that the economic ramifications of the conflict in the Middle East, while currently under evaluation, could lead to persistent inflationary pressures that might require a tighter monetary policy response. Federal Reserve Bank of Philadelphia President Anna Paulson remarked on Friday that a “mildly restrictive” monetary policy is “well positioned” for an uncertain outlook marked by persistently high inflation pressures.
Gold demand in India showed a subdued performance last week, attributed to high prices and import duties. Simultaneously, premiums in the primary consumer market, China, diminished due to the existing cautious sentiment. Gold speculators augmented their net long positions by 2,544 contracts, elevating the total to 96,931 in the week concluding May 26. Spot silver increased by 0.4% to $75.54 per ounce, platinum saw a rise of 1% to $1,935.65, and palladium experienced a 1.3% gain to $1,371.24.