Falling oil prices and lower Treasury yields boost gold prices ahead of this week’s Federal Reserve meeting and US inflation data.
Gold prices climbed on Monday, supported by a sharp decline in oil prices that eased inflation concerns and reduced expectations for further monetary tightening. The drop in oil also weakened the US dollar and pushed Treasury yields lower, improving the appeal of non-yielding assets like bullion.
The move follows a temporary pause in US-Iran tensions and comes ahead of this week’s Federal Reserve meeting. Markets are now focused on the Fed’s policy stance and upcoming US inflation data for clues on the interest-rate outlook. Analysts expect gold to remain supported near current levels if yields stay contained.
However, any hawkish surprises from the Fed could limit further upside for gold in the near term, analysts warned.