Gold prices rose modestly on Monday as crude oil futures retreated from recent highs and investors assessed whether the US Federal Reserve could raise interest rates at its upcoming policy meeting.
Bullion gained as much as 0.6% to approximately $4,190 an ounce, recovering slightly after losses last week. The move came as traders weighed developments in the Middle East alongside uncertainty surrounding the Federal Reserve’s next interest-rate decision.
Brent crude fell from a five-month high as market participants evaluated signs that oil supplies from the Middle East were holding near pre-war levels, despite renewed outbreaks of fighting in the region.
Developments in oil markets remain important for gold investors because changes in energy prices can influence inflation expectations and, consequently, the outlook for interest rates. Persistent inflationary pressure could strengthen expectations of tighter monetary policy, potentially weighing on gold, which does not pay interest.
For now, traders are closely monitoring signals from the Federal Reserve ahead of next week’s meeting. Expectations about the direction of interest rates, movements in crude oil prices and geopolitical developments are likely to remain key drivers of bullion’s near-term performance.
