Gold edges up as lower oil prices pare rate-hike expectations

Spot gold and silver both saw slight increases in value on Monday, with gold reaching US$4,206.86 an ounce and silver reaching US$61.12. This rise comes as lower oil prices are helping to ease inflation concerns, giving traders some optimism that the US Federal Reserve may hold off on further interest rate hikes. Brent crude, a key oil benchmark, fell to around US$103 a barrel, potentially due to an "energy ceasefire" between Russia and Ukraine, though specifics were not provided.

Gold also benefitted from a holiday for US debt markets on Monday, as yields on the 30-year US Treasury note retreated from the previous Friday. Strategist Christopher Wong from Oversea-Chinese Banking Corp. noted that softer inflation, coupled with further declines in long-end yields and the US dollar, could lead to further gold price recovery.

Investment demand has also supported gold in recent days, with gold-backed exchange-traded funds adding holdings and the People's Bank of China increasing its purchases. However, gold has still lost about 20% since the start of the US-Iran war in late February, and rising energy supply disruptions in the Middle East have kept inflation risks high, potentially leading to tighter monetary policy by some central banks.

The market will be watching for inflation data on Wednesday and the appearance of Fed chairman Kevin Warsh on Thursday at the International Monetary Fund's annual meeting in Bangkok, which may offer further insight into the central bank's stance. Platinum and palladium also showed gains. As of 11:49 am, spot gold was trading at US$4,206.86 an ounce, while silver rose to US$61.12, with the Bloomberg Dollar Spot Index falling by 0.1%.