Gold (XAU/USD) holds firm on Monday as buyers take a breather following last week’s sharp rally, with the broader market theme still centred on the Federal Reserve’s (Fed) interest-rate outlook and developments in the Middle East.
At the time of writing, XAU/USD trades around $4,333, little changed on the day
The precious metal gained more than 7% last week and climbed to its highest level since June 17 on Friday. The advance was driven by a dovish repricing of Fed rate-hike expectations following weaker-than-expected US Nonfarm Payrolls (NFP) data. Inflation concerns also eased as Iran and Oman reportedly moved closer to finalising an agreement to reopen the Strait of Hormuz, pushing Oil prices lower.
These developments weighed on the US Dollar (USD) and US Treasury yields, although the downside has been limited as Oil prices remain well above pre-war levels, keeping energy-driven inflation concerns alive. The US Dollar Index (DXY) is attempting to form a base near a two-month low, trading around 99.71, up 0.11% on the day. Meanwhile, the benchmark 10-year US Treasury yield holds near 4.65%, below its recent peak of around 4.74%, the highest level since January 2025.