Ammon News - Gold edged higher on Monday as softer oil prices tempered inflation concerns, while ‌investors awaited the Federal Reserve's policy decision later this week.

Spot gold rose 0.4% to $4,010.51 per ounce by 0544 GMT, after hitting its lowest level since mid-July in the previous session. Bullion posted a ​4% weekly fall on Friday, its steepest weekly decline since June.

US gold futures ​for December delivery gained 0.4% to $4,024.00.

"The jump that we've seen is mostly symptomatic ⁠of the kind of relief provided by a lower oil price, but one that ​could easily be capped as markets position for the FOMC decision in a couple of ​days' time," said Kyle Rodda, senior financial market analyst at Capital.com.

"Gold will continue to trade as a function of interest rate expectations and geopolitical risks."

Oil prices fell on Monday after surging to near six-month highs ​last week, amid hopes of easing hostilities between the United States and Iran, although ongoing ​attacks on Saudi Arabia by Yemen's Houthis kept supply concerns in focus.

Qatari mediators were in Tehran on Sunday to help ‌de-escalate ⁠regional tensions in coordination with the United States, an official briefed on the situation told Reuters.

Markets await the Fed's policy meeting on October 27-28.

The US Personal Consumption Expenditures data, a key gauge closely watched by the central bank as it targets a 2% inflation rate, ​is due the next ​day.

Traders largely expect the ⁠central bank to leave rates unchanged this week, while expectations for a hike in December are at 77%, according to the CME's FedWatch Tool.

Although ​gold is typically seen as an inflation hedge, higher interest rates ​tend to ⁠diminish non-yielding bullion's appeal to investors.

Meanwhile, US business activity slowed modestly in October, though robust demand allowed companies to raise prices for goods and services, a sign that inflation could increase further ⁠and ​remain persistently high in the coming months.

Among other metals, ​spot silver rose 0.6% to $54.19 per ounce, platinum dropped 0.2% to $1,548.30 and palladium gained 0.2% to $1,046.25.


Reuters