Gold holds near seven-week low, US economic data on tap

LONDON: Gold steadied on Tuesday but hovered near a more than seven-week low on concerns that the Federal Reserve may keep interest rates higher for longer, while investors awaited a slew of US economic data.

FUNDAMENTALS

* Spot gold was little changed at US$4,123.29 per ounce, as of 0038 GMT, after hitting its lowest level since Aug 5 in the previous session. US gold futures fell 0.3 per cent to US$4,155.50.

* Oil prices rose for a second successive session amid lingering concern over Middle East supply disruption.

* Elevated oil prices can fuel inflation by increasing costs across the economy, potentially prompting central banks to raise interest rates to keep price pressures in check. Despite its reputation as an inflation hedge, gold tends to struggle in a high-rate environment as investors favor assets that generate yield.

* US and Iranian officials spoke separately with mediators as part of a renewed effort to end seven months of war, according to officials of both countries.

* Markets currently see a 70.3 per cent probability of a Fed rate hike in October, according to CME's FedWatch Tool.

* Fed Governor Lisa Cook said she expects continued inflationary pressure in coming months stemming from artificial intelligence-related demand and higher oil prices, though she stopped short of saying more rate hikes will be needed.

* Attention is on a raft of US economic data due this week, including job openings, ADP employment, PCE figures and nonfarm payrolls, for fresh signals on monetary policy.

* Elsewhere, the London Bullion Market Association will defend itself in London's High Court from Oct 7 against a claim that it owed a duty of care to two Tanzanian artisanal miners allegedly killed at the North Mara gold mine in 2019.

* Among other metals, spot silver fell 0.3 per cent to US$60.76, platinum steadied at US$1,717.70 and palladium was flat at US$1,214.75.