Gold dips as inflation concerns linger; markets watch US-Iran talks

Gold prices nudged lower on Monday, weighed down by inflation worries that clouded the U.S. monetary policy outlook, while markets awaited developments in U.S.-Iran peace negotiations.

FUNDAMENTALS

* Spot gold was down 0.3% at $4,599.45 per ounce, as of 0114 GMT. U.S. gold futures for June delivery fell 0.7% to $4,611.40.


* U.S. President Donald Trump said that Washington would start an effort on Monday morning ‌to free ⁠ships stranded ⁠in the Strait of Hormuz as a "humanitarian gesture" to aid neutral countries in the U.S.-Israeli war with Iran.

* Iranian state media reported that Washington conveyed its response to Iran's 14-point proposal via Pakistan, and that Tehran was now reviewing it.

* Oil prices eased but held above $100 a barrel, with the lack of clarity around a potential U.S.-Iran peace deal remaining in focus.

* Increasing oil prices could encourage central banks ⁠to hold ‌interest rates higher for longer, which would pressure non-yielding assets such as gold as investors turn to alternate options like Treasury yields that ⁠offer better returns.

* Last week, the U.S. Federal Reserve kept its interest rates unchanged and adopted a hawkish tone that saw markets give up on any hope for a rate cut there this year.

* Federal Reserve Bank of Minneapolis President Neel Kashkari said that the longer the Iran war goes on, the greater the risks of higher inflation and economic damage, all of which limit how much guidance the central bank should provide on rate ‌policy right now.

* Inflation data last week was "bad news" for the U.S. Fed and means the central bank needs to be cautious about rate cuts until inflation begins to ⁠recede, Chicago Fed President Austan Goolsbee said on Saturday.

* Data showed that U.S. inflation accelerated in March as the Iran war raised gasoline prices, with the Personal Consumption Expenditures Price Index jumping 0.7%, the largest gain since June 2022.

* Gold speculators raised net long positions by 3,924 contracts to 91,574 in the week ended April 28. [CFTC/]

* Spot silver edged 0.1% higher to $75.38 per ounce, platinum gained 0.2% to $1,991.85, and palladium was down 0.3% at $1,519.66.

DATA/EVENTS (GMT)

0750 France HCOB Manufacturing PMI April

0755 Germany HCOB Manufacturing PMI April

0800 EU HCOB Manufacturing Final PMI April

1400 US Factory Orders MM April