Gold prices fell slightly in the first trading session of the week as the USD strengthened and crude oil prices rose, as investors awaited US President Donald Trump's decision on the proposal to extend the ceasefire agreement with Iran.
Spot gold fell 0.38%, to 4,505.72 USD/ounce at 2:20 PM Vietnam time, after hitting a two-week high in the previous session. Meanwhile, US gold futures for August delivery fell 0.9% to 4,551.60 USD/ounce.
The rising USD makes gold - valued in greenbacks - more expensive for investors holding other currencies.
Mr. Tim Waterer - Market Analysis Director at KCM Trade commented: "The upward momentum of oil prices along with the fact that the US and Iran have not yet reached an agreement makes the gold market start the new week in a state of lack of clear direction.
Oil prices rose more than 2% in the first trading session of the week, raising concerns about inflationary pressure and the possibility of interest rates continuing to remain high.
Although gold has long been seen as an inflation hedging tool, this precious metal often loses its appeal in a high-interest rate environment because it does not yield yields.
Ms. Michelle Bowman, Vice President of Surveillance of the US Federal Reserve (Fed), said that the impact of the conflict in the Middle East on the economy is still controllable, but the risk of prolonged inflation may force the Fed to maintain a tighter monetary policy.
According to Mr. Tim Waterer, gold prices are still likely to increase to 5,500 USD/ounce by the end of 2026 if favorable conditions appear, especially with falling oil prices, weakening USD, strong gold buying activity from central banks continuing to be maintained and safe-haven demand in the face of geopolitical risks as well as inflation still at a high level.
On other precious metals markets, spot silver prices rose 0.7% to $75.81/ounce. Platinum prices rose 1.5% to $1,945.15/ounce, while palladium rose 1.4% to $1,372.75/ounce.
