Gold gains on weaker oil, dollar; US inflation data in focus

Gold prices surged on Monday due to a weaker dollar and lower oil prices, as investors eagerly awaited US inflation data for insights into the Federal Reserve's future policy decisions. Spot gold increased by 0.3%, reaching $4,206.01 an ounce, and US gold futures for December delivery also climbed by 0.3% to $4,230.40. Analyst Tim Waterer explained that the energy ceasefire between Russia and Ukraine, reported by President Trump, along with a less volatile dollar, created an opportunity for gold to rise at the start of the week.

The energy ceasefire, announced by Trump on Sunday, aimed to be effective immediately, though Ukrainian President Zelenskiy was still awaiting the details. Oil prices dropped as traders anticipated increased Russian supplies. The US dollar remained relatively stable, making gold more affordable for international buyers. Inflation concerns are typically a deterrent for gold, but the current low-interest environment makes non-yielding bullion more appealing.

Investors are now eagerly anticipating key US inflation data, including the Consumer Price Index (CPI) on Wednesday, the Producer Price Index (PPI) and retail sales figures on Thursday. FedWatch tool projections indicate a 17% chance of a rate hike in October and an 86% likelihood of an increase by December. Silver prices rose 0.5% to $61.12 per ounce, while platinum and palladium increased by 1% and 1.2%, respectively, to $1,704.70 and $1,161.81.