Gold Holds Near Seven-Week High as Fed Bets and Iran Risks Support Safe-Haven Demand

Gold prices held near a seven-week high on Monday after weaker U.S. labor data reduced expectations for a September Federal Reserve rate hike. Spot gold was up 0.3% at around $4,354 an ounce, while futures also edged higher.

The market is now focused on Wednesday’s U.S. consumer price index (CPI) and Thursday’s producer price index (PPI). Softer inflation could reinforce expectations for a less restrictive Fed policy, potentially supporting gold by lowering the opportunity cost of holding the non-yielding asset. However, higher oil prices linked to Middle East tensions could keep inflation risks elevated and limit expectations for monetary easing.

Geopolitical uncertainty remains another support for bullion, with developments around Iran and the Strait of Hormuz keeping safe-haven demand in focus.

Trader outlook: Gold remains supported by both softer Fed expectations and geopolitical risk, but upcoming U.S. inflation data could determine whether the rally extends. Traders may watch CPI, Treasury yields and the U.S. dollar for confirmation of the next directional move.