ISLAMABAD – Gold prices edged lower on Monday as a stronger US dollar and rising oil prices weighed on the market, while uncertainty over stalled US-Iran peace talks heightened concerns about prolonged inflation and interest rates remaining elevated.
In the international bullion market, spot gold declined by 0.3 per cent to $4,694.26 per ounce in early trading.
The precious metal had already recorded a weekly loss of 2.5 per cent, ending a four-week rally. Meanwhile, US gold futures for June delivery slipped by 0.9 per cent to $4,697.60 per ounce.
Market sentiment remained cautious as tensions between the United States and Iran persisted. US President Donald Trump stated that Iran could initiate negotiations to end the ongoing conflict but reiterated that Tehran would not be allowed to possess nuclear weapons. Diplomatic efforts faced a setback after planned visits by US envoys to Pakistan were cancelled, following limited progress in talks held in Islamabad.
Rising oil prices and a firmer dollar further pressured gold, as prolonged disruptions in Middle Eastern energy exports unsettled global markets ahead of key central bank meetings this week.
In the United States, political developments also drew attention as Republican Senator Thom Tillis indicated support for advancing the Senate confirmation of Federal Reserve chair nominee Kevin Warsh after an investigation involving current Fed Chair Jerome Powell was dropped.
On the demand side, gold premiums in India surged to their highest level in over two months due to tight supply, while buying activity improved in China.
Holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, declined by 0.2 per cent to 966.30 metric tons.
Investors are now closely watching the upcoming US Federal Reserve policy decision, expected after its two-day meeting on Wednesday, for further direction on interest rates.
Among other precious metals, silver, platinum and palladium also recorded declines, each falling by around 0.3 per cent in international trading.
