(July 6): Gold steadied after posting its first weekly advance since May, supported by reduced expectations that the US Federal Reserve will hike interest rates.
Bullion was near US$4,160 an ounce, having gained more than 2% last week. Soft US jobs data and lower energy prices prompted traders to dial back bets on monetary policy tightening. Oil dropped on Monday as more tankers moved through the Strait of Hormuz and Opec+ signalled higher supplies.
“Gains remained limited as inflation continues to stay above the Fed’s target, keeping policymakers cautious about easing financial conditions,” said Manav Modi, commodities analyst at Motilal Oswal Financial Services. “While lower oil prices have eased concerns over energy-driven inflation, markets continue to monitor broader price pressures stemming from AI-related investment demand and weather-related supply disruptions.”
Crude prices, a key driver of inflation at the beginning of the US-Iran conflict, saw their biggest quarterly slump since 2020 as energy flows through the strait picked up following an interim peace deal between the US and Iran. That has released some of the inflationary pressure that has weighed on non-yielding gold, which tends to perform better when borrowing costs are lower. Bloomberg’s gauge of the dollar headed for its first gain in three days on Monday.
Meanwhile, US President Donald Trump and his allies have renewed a push to reshape the Fed after the Supreme Court last week blocked an effort to fire Governor Lisa Cook. Top officials and outside allies are actively exploring ways to remove members of the central bank’s Board of Governors in Washington to clear the way for more of the president’s own picks, according to people familiar with the matter.
See also: Gold rises towards US$4,200 as weak jobs data lowers rate-hike odds
Repeated challenges to the Fed’s independence by the Trump administration helped supercharge bullion’s rally through the latter months of 2025, as part of the so-called debasement trade — a bet on inflation and swelling debt burdens in developed economies.
Spot gold declined 0.3% to US$4,166.47 an ounce at 11.35am in Singapore. Silver edged down 0.7% to US$61.98 an ounce. Platinum and palladium were little changed. The Bloomberg Dollar Spot Index, a gauge of the US currency, gained after giving up 0.3% last week.
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