Gold Down Amid Geopolitical Tensions
Gold edged down from its highest level since Israel’s weekend strikes on Iran appeared more contained than many had expected.
Bullion traded lower near $2,739 an ounce on Monday after Israeli aircraft struck military targets across Iran on Saturday, avoiding oil and nuclear facilities. Tehran did not immediately promise to respond, with the latest development likely to dampen some demand for the safe-haven asset.
This week, traders await several key U.S. data figures. Inflation and payrolls figures are likely to provide clues on the pace of interest rate cuts by the Federal Reserve this year, after recent strong economic readings caused traders to scale back bets on aggressive reductions. Lower interest rates tend to benefit bullion because the metal does not pay interest.
Gold has surged more than 30% this year, hitting an all-time high of $2,758.49 last week. The rally has gathered pace in recent months on geopolitical tensions in the Middle East, while traders assess risks from the upcoming U.S. presidential election.
Money managers have also played their part, with hedge funds increasing their net-long positions in gold and investors adding to holdings in exchange-traded funds.
Spot gold dipped 0.3% to $2,739.89 an ounce at 7:41 a.m. in Singapore, after ending last week 1% higher. The Bloomberg Dollar Spot Index was steady after a fourth weekly increase. Palladium extended gains, silver and platinum were little changed.
Source: Bloomberg
