COMEX gold was trading at $4,383 an ounce, down $16.70, or 0.38%, from the previous close of $4,400. The contract touched an intraday high of $4,411.50 an ounce and a low of $4,373.90 an ounce.
COMEX silver, however, gained 0.23% to $63.645 an ounce. It moved between $63.195 and $64.240 an ounce during the session.
The moves come after a strong week for bullion.
International gold futures rose about 7% last week to $4,399.70 an ounce, while silver futures gained nearly 10% to $63.50 an ounce, according to the market data cited in the weekend outlook.
Why gold remains sensitive to US rates
A softer-than-expected US jobs report has reduced expectations of an immediate rise in borrowing costs and supported bullion prices last week. Gold generally benefits from lower interest-rate expectations because it does not pay interest.
Markets are now turning their attention to the US consumer price inflation data due later this week. A stronger-than-expected inflation reading could reduce expectations of monetary easing and put pressure on gold, while softer data could support the case for lower rates.
The US dollar will also remain an important driver. A weaker dollar tends to make dollar-denominated gold cheaper for holders of other currencies and can support demand.
Geopolitical risks add to volatility
Developments in West Asia and the outlook for US-Iran relations could also influence bullion prices. Any escalation in geopolitical tensions could increase demand for safe-haven assets such as gold.
At the same time, oil prices have moved higher amid uncertainty over shipping through the Strait of Hormuz. Higher energy prices could add to inflation concerns and influence expectations around the Federal Reserve’s rate path.
What analysts expect
Analysts cited in the weekend outlook expect gold and silver to retain a positive bias in the near term, although they see volatility remaining elevated.
Pranav Mer, Senior Vice President, EBG – Commodity & Currency Research, JM Financial Services, expects gold and silver to move higher in the short term, with gold potentially moving towards ₹1.57 lakh per 10 grams and silver towards ₹2.80 lakh per kg.
Jateen Trivedi, VP Research Analyst, Commodity and Currency, LKP Securities, said the recent gold rally was supported by weaker US labour-market data, a softer dollar and expectations of a more accommodative Federal Reserve policy.
For investors, the key triggers this week will therefore be US inflation data, changes in Fed rate expectations, the dollar, oil prices and developments in West Asia.
-With Reuters inputs
