Gold prices have steadied after their first weekly advance since May, with bullion near $4,190 an ounce. This stability follows a more than 2% gain last week, fueled by reduced expectations for a US Federal Reserve interest rate hike. Soft US jobs data and lower energy prices have prompted traders to scale back their bets on monetary policy tightening.
Oil prices also dropped on Monday, contributing to the easing inflationary concerns. This decline was attributed to increased tanker traffic through the Strait of Hormuz and indications from OPEC+ of higher supplies. The combination of these factors has created a more favorable environment for non-yielding assets like gold.
The market's focus is now shifting to the minutes from the Fed's June meeting, which are expected to provide further insights into policymakers' thinking regarding interest rates. While some analysts believe the minutes might lean hawkish, the recent decline in oil prices and the softer employment report are seen as factors that could persuade the Fed to keep rates on hold for the foreseeable future, rather than pursuing further tightening.
