Gold Market Overview

At 16:45 ET (20:45 GMT) on Monday, spot gold slipped 0.3% to $4,163.56 per ounce, while gold futures rose 1.2% to $4,175.20 per ounce, leaving the metal in a mixed trading range after earlier gains.

Federal Reserve Policy Context

Traders were balancing the gold move against the Federal Reserve’s monetary‑policy outlook following a softer‑than‑expected U.S. non‑farm payroll report for June, which suggested a resilient but not overheating labour market. The data gave the Fed room to consider holding interest rates steady rather than tightening further. New Fed Chair Kevin Warsh, in remarks last month, said the central bank would abandon forward guidance and concentrate solely on combating inflation. He reiterated this stance in public comments made in Portugal, where he also noted that inflation risks had receded as oil prices fell back to pre‑February‑Israeli‑Iran conflict levels. The minutes of the Fed’s June meeting, to be released on Wednesday, are expected to show that half of the policymakers believed a rate hike could still be justified this year.

Wells Fargo analysts, led by Tom Porcelli, argued that recent inflation strength was largely driven by supply‑side factors such as tariffs and energy costs, which should fade over time. They highlighted that oil prices had continued to decline since June and that the June employment report showed no signs of labour‑market overheating. Consequently, the analysts expect the Federal Open Market Committee to keep the funds rate on hold for the foreseeable future.

Oil Market and Hormuz Traffic

Oil prices edged lower on Monday after the Organization of the Petroleum Exporting Countries (OPEC) and its allies, including Russia, agreed over the weekend to increase production targets by 188,000 barrels per day starting in August, extending the phased rollback of voluntary output cuts. While much of the additional supply had not yet reached the market, the decision reinforced expectations of a gradual supply recovery as Gulf conditions normalise.

Shipping traffic through the Strait of Hormuz proved resilient over the weekend. Kpler data recorded 108 verified vessel crossings between Friday and Sunday, indicating continued flow despite regional tensions.

Geopolitical Comments

President Donald Trump, speaking to reporters on Monday, warned that Iran would face “nuclear dust” and asserted that the United States would either reach a deal or finish the job, emphasizing a firm stance amid the funeral of former Supreme Leader Ayatollah Ali Khamenei. Trump also noted that the U.S. had granted Iran “a week off” for the mourning period.

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