By: Economy Middle East

Gold prices climbed on Monday as a decline in oil prices following U.S. President Donald Trump’s decision to delay further strikes on Iran eased concerns over inflation and the potential for higher interest rates.

Spot gold gained 0.62 percent to $4,067.92 per ounce by 6:10 GMT, while U.S. gold futures advanced 0.39 percent to $4,123.12.

In the UAE, gold rates edged higher, with 24-carat gold rising AED2.5 to AED489.75 and 22-carat gold gaining AED2.25 to AED453.5.

In addition, 21-carat gold rose AED2.5 to AED435 and 18-carat gold ticked up AED2 to AED372.75.

Meanwhile, 14-carat gold rose AED1.5 to AED290.75.

Gold prices rise as U.S. dollar dips

Gold prices rose as the U.S. dollar weakened after authorities intervened in currency markets to support the yen, making dollar-denominated gold more attractive for buyers holding other currencies.

Gold started the week on a positive note, though gains remained capped by uncertainty surrounding oil markets and developments in the Middle East. Trump said talks with Iran were set to take place on Monday but stopped short of providing a timeline for reaching an agreement. Meanwhile, oil prices dropped more than 5 percent.

Gold prices have faced pressure since the beginning of the U.S.-Iran conflict, as concerns that a war-related surge in inflation could push central banks to maintain or raise interest rates weighed on the non-yielding asset. While gold is typically viewed as a hedge against inflation, its appeal often declines when interest rates are high because it does not generate income.

U.S. labor market data in focus

Market participants will turn their attention to a series of U.S. labor market indicators due this week, including job openings, the ADP employment report, weekly jobless claims and the closely watched nonfarm payrolls data.

Three Federal Reserve officials who dissented at last week’s policy meeting in favor of an interest rate increase warned on Friday that delaying a hike in short-term borrowing costs could allow inflation to remain above the central bank’s 2 percent target.

Analysts at Standard Chartered said in a note that they expect gold prices to find support in the near term before gaining momentum from seasonal demand.

Other precious metals

As gold prices rose, the broader precious metals market advanced. Spot silver rose 1.4 percent to $58.46 an ounce, platinum gained 0.5 percent to $1,650.63, and palladium advanced 1.6 percent to $1,293.50.