Gold prices experienced a modest increase during early trading on Monday, buoyed by a weaker dollar and recent economic indicators that tempered expectations for a U.S. interest rate increase in the upcoming month. Spot gold increased by 0.3% to $4,388.62 per ounce as of 0028, while U.S. gold futures for December delivery rose by 0.2% to $4,444.30. The U.S. dollar index experienced a decline of 0.1%, which rendered metals priced in dollars more accessible for holders of other currencies. An unexpected decline in U.S. nonfarm payrolls in July, along with data released last week indicating only mild consumer price inflation, has diminished expectations regarding a potential interest rate hike by the U.S. Federal Reserve next month.

Markets are currently assigning a 33% probability to a rate hike in September, a decrease from the 47% observed a month prior, as indicated by CME’s FedWatch Tool. Gold, which does not yield interest, typically exhibits strong performance in an environment characterised by low interest rates. Spot gold recorded a weekly increase on Friday. The Fed’s July meeting minutes, scheduled for release on Wednesday, will be closely examined for additional insights into the trajectory of monetary policy. On the geopolitical front, U.S. President Donald Trump’s envoys convened with Egyptian, Qatari, and Turkish mediators in Cairo on Sunday, according to a diplomatic source, with the objective of advancing his Gaza peace plan, despite Israel continuing its airstrikes in the enclave.

In other regions, gold discounts in India expanded last week, reaching their highest levels in over two months, as a surge in bullion prices dampened consumption. Meanwhile, interest in China remained subdued, despite ongoing purchases by the central bank. In other metals, spot silver increased by 0.8% to $65.19 per ounce. Platinum rose by 0.4% to $1,755.40, whereas palladium gained 1.2% to $1,329.00.