Spot Gold retreated on Monday, easing from a 2-week high, weighed down by a firmer US Dollar and rising crude oil prices, while markets awaited US President Donald Trump’s decision on Iran proposal.
Trump said on Friday that he would soon decide on a proposed deal to extend the ceasefire with Iran.
Meanwhile, the US armed forces hit Iranian military sites over the weekend, while Iran’s Revolutionary Guards responded by targeting a US base.
The US Dollar Index rebounded from Friday’s 2-week low. A firmer dollar makes dollar-priced Gold less appealing to international investors holding other currencies.
Oil prices surged over 2% on Monday, keeping inflation concerns alive.
Elevated energy costs have added to global inflation expectations and kept central bank policy makers wary of adopting a more dovish stance.
Federal Reserve Vice Chair for Supervision Michelle Bowman said last week that the impact of the Middle East conflict on the economy could induce persistent inflation, while the US central bank might need to tighten monetary policy.
Spot Gold was last down 0.81% on the day to trade at $4,503.59 per troy ounce.
“By the end of 2026, gold still has potential to hit $5,500 should favourable circumstances arise, notably lower oil prices and a depreciation of the dollar, underpinned by continued robust central bank buying and its role as a geopolitical and inflation hedge,” Tim Waterer, chief market analyst at KCM Trade, was quoted as saying by Reuters.
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