Gold prices hovered near a three-month low on Monday, as investors awaited this week’s Federal Reserve policy meeting for clues on the policymakers’ outlook on US interest rates.
Spot gold was down 0.2% at $3,987.45 per ounce by 0037 GMT, after hitting its lowest level since mid-July in the previous session. Bullion posted a 4% weekly fall on Friday, its biggest weekly decline since June.
US gold futures for December delivery dropped 0.2% to $4,000.80.
Oil prices fell on Monday after surging to near six-month highs late last week, although ongoing attacks on Saudi Arabia kept supply concerns in focus.
Elevated energy prices bolster expectations of higher-for-longer interest rates by the Fed, increasing the opportunity cost of holding non-yielding bullion.
On the geopolitical front, Saudi Arabia said its main airport resumed operations at two terminals on Sunday even as Yemen’s Iran-aligned Houthis vowed to keep striking the facility, which they called a “military target”.
Qatari mediators were in Tehran on Sunday as part of an effort to de-escalate regional tensions in coordination with the United States, an official briefed on the situation told Reuters.
US consumer sentiment edged down to near a record low in October as rising prices because of the Middle East conflict soured households’ views of the economy on the doorstep of midterm congressional elections centering on affordability issues, a survey showed on Friday.
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.
Markets await the Fed’s policy meeting this week along with the Personal Consumption Expenditures (PCE) data, a key gauge closely watched by the central bank as it targets a 2% inflation rate.
Traders are pricing in about a 9% chance of an interest rate hike this week, while expectations for a hike in December remain at 80%.
Among other metals, spot silver rose 0.2% to $54 per ounce, platinum fell 0.1% to $1,549.42 and palladium gained 0.4% to $1,047.90.
