Gold gains as oil slumps after Trump holds off on Iran attack
The metal has faced pressure since the Iran war started, with rising inflation potentially sparking interest rates hikes
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GOLD rose on Monday (Aug 3) as oil prices tumbled after US President Donald Trump held off on a fresh attack on Iran in hopes of a swift deal, slightly easing concerns about inflation and higher interest rates.
Spot gold was up 0.7 per cent at US$4,067.06 per ounce, as of 0023 GMT. US gold futures rose 0.9 per cent to US$4,065.60.
Trump said late on Saturday on his Truth Social platform that Iran and other Middle Eastern countries had asked for time to complete a deal that would lead to “the Immediate, Complete and Total” reopening of the Strait of Hormuz and “an end to Iran’s nuclear threat”.
Oil prices fell more than US$5 a barrel at Monday’s open.
Gold has come under pressure since the start of the US-Iran conflict, as a war-driven rise in inflation could prompt central banks to raise interest rates.
Although bullion is traditionally viewed as a hedge against inflation, its appeal tends to diminish in a high-interest rate environment because it does not yield interest.
Three US Federal Reserve officials who dissented at last week’s policy meeting in favour of an interest rate hike expressed concern on Friday that without an immediate increase in short-term borrowing costs, inflation will stay stuck above the Fed’s 2 per cent target, where it has been for more than five years.
Market participants will also focus on a slew of US jobs reports due this week, including job openings data, the ADP employment report, weekly jobless claims and the nonfarm payrolls report.
Spot silver gained 0.7 per cent to US$58.02 per ounce, platinum climbed 0.7 per cent to US$1,653.78, and palladium firmed 1.5 per cent to US$1,293.00.
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Russia’s Norilsk Nickel, the world’s largest palladium producer, reported on Friday that its revenue and net profit in the first six months had sharply increased. REUTERS
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