Gold pulled back modestly in early Monday trading, pressured by a firmer dollar and rising oil prices, as markets held their breath over whether Donald Trump will extend the proposed ceasefire agreement with Iran.
Spot gold fell 0.2% to $4,527.36 an ounce by 0156 GMT, retreating after touching a two-week high in the previous session. US gold futures dropped further, down 0.8% to $4,558.10.
The dollar’s rise made gold more expensive for buyers holding other currencies, adding to the downward pressure. Oil prices climbing more than 2% in early trade also revived inflation concerns, which could complicate the Federal Reserve’s path on rates.
Trump said on Friday he would decide soon on a proposed extension to the Iran ceasefire, even as both sides remain at odds over core issues in the conflict. Israeli Prime Minister Benjamin Netanyahu meanwhile ordered forces to deepen their advance into Lebanon on Sunday, pressing the campaign against Iran-backed Hezbollah despite a ceasefire announced more than six weeks ago.
Federal Reserve Vice Chair for Supervision Michelle Bowman said Friday that the Middle East conflict’s economic impact, still being assessed, could produce persistent inflation requiring tighter monetary policy.
Physical demand offered little support. Gold buying in India remained soft last week due to elevated prices and import duties, while premiums in China, the world’s largest gold consumer, narrowed amid cautious sentiment.
Among other precious metals, silver gained 0.4% to $75.54 an ounce, platinum rose 1% to $1,935.65, and palladium climbed 1.3% to $1,371.24.
