〈Precious Metals Wrap〉Gold Dips as Middle East Uncertainty and Inflation Risks Linger

Gold prices fell on Monday (3rd) as uncertainty surrounding the Middle East conflict persists and concerns over rising inflation remain unresolved. Markets are closely watching a series of employment data due this week to assess the Federal Reserve's (Fed) policy outlook.

Spot gold closed down 0.3% at $4,030.34 per ounce.

August-delivery gold futures dropped 0.4% to $4,090.50 per ounce.

Edward Meir, analyst at Marex, said: "Gold has been consolidating between $4,000 and $4,200 per ounce for over a month, as the market anticipates inflation could reignite, particularly fearing that July's data might reverse June's downward trend."

The Fed held rates steady last week, but three officials expressed support for a rate hike, arguing that delaying hikes could allow inflation to remain above the central bank's 2% target. New York Fed President John Williams stated he is prepared to raise rates if inflationary pressures do not ease.

Brent crude surged over 20% last month after the U.S. and Iran resumed attacks on each other, and several tankers were attacked near Oman. Higher oil prices reinforce the likelihood of the Fed maintaining high interest rates for longer, which dampens the appeal of non-yielding assets like gold.

Iran stated on Monday that there are no ongoing negotiations with the U.S. and no plans to hold any meetings, contradicting U.S. President Trump's claim that attacks were paused due to ongoing talks.

Market participants are awaiting a string of employment data this week, including the ADP employment change and the official non-farm payrolls report.

The Bank of Korea announced on Monday that it will procure gold from domestic producers to diversify supply and increase its gold holdings.

Other precious metals trading:

Spot silver was flat at $57.63 per ounce.

Spot platinum fell 1.6% to $1,615.25 per ounce.

Spot palladium declined 1.7% to $1,252.62 per ounce.