Gold Edges Higher as Markets Weigh Lower Oil Prices and Hawkish Fed Signals

Gold edged up Monday, supported by a pullback in oil prices even as traders stayed cautious ahead of this week's U.S. jobs data for clearer Fed policy signals.

→ Spot gold: $4,055.25/oz, up 0.3%

→ Gold futures: $4,111.05/oz, up 0.1%

What moved the market: Sentiment briefly improved after President Trump said he called off a planned Iran strike and that talks would begin Monday. Iran's Foreign Ministry disputed this, stating no negotiations with Washington were underway, leaving uncertainty over developments in the Strait of Hormuz and broader geopolitical risks.

The Fed backdrop remains a key focus. Last week's rate decision to hold steady wasn't unanimous, with three regional Fed presidents dissenting in favor of a 25-basis-point hike. New Fed Chair Kevin Warsh's post-decision press conference did little to reassure markets that inflation was under control, reinforcing expectations that interest rates could remain elevated, a backdrop that analysts generally view as less supportive for non-yielding assets such as gold.

Technical indicators remain under close watch: Spot gold is trading below its 50-day, 100-day and 200-day simple moving averages. Some technical analysts view these levels as potential areas of resistance, although future price movements remain dependent on broader market conditions.

Elsewhere, the U.S. dollar held steady following reports that Japanese authorities intervened to support the yen. ING analysts noted that softer oil prices were also weighing on the dollar, citing reports that negotiations, rather than military action, were Washington's preferred approach to engaging with Iran.

Market focus: Market participants are closely watching this week's U.S. employment data for further insight into the Federal Reserve's policy outlook. Analysts said the results could influence expectations for interest rates and contribute to short-term moves across gold, the U.S. dollar and Treasury yields.

Sources: Reuters/Investing.com, Federal Reserve, ING