Gold prices climbed back above $3,900 an ounce on Monday, rebounding modestly from one-year lows as falling oil prices eased concerns about inflation and the likelihood of further interest rate increases. The pullback in oil came amid signs of continued diplomatic efforts to avert renewed US military action against Iran following the midterm elections. President Trump had earlier threatened to resume strikes on Iran after the vote, while Tehran warned it would respond with broader retaliation.
Against this backdrop, investors are now focused on this week’s closely watched US jobs report for additional guidance on the Federal Reserve’s policy outlook. Futures markets currently imply roughly a 75% probability of a rate hike in December. Gold had come under heavy selling pressure last week as persistent worries over energy-driven inflation reinforced expectations of further Fed tightening. At the same time, a broader global equity selloff, fueled by mounting concerns around artificial intelligence, prompted investors to liquidate gold positions to meet margin calls and cover losses in other asset classes.
