Gold rises over 1% as softer oil prices ease inflation worries

Gold prices climbed over 1% on Monday as oil prices softened, easing inflation worries, while investors awaited crucial US inflation data and hints from the Federal Reserve on its policy direction. The precious metal rose 1.4% to $4,123.46 per ounce by 0428 GMT, with US gold futures for December delivery also increasing 1.4% to $4,132.70.

Bullion's gains of around 5% last week were driven by lower oil prices, which eased inflation concerns and reduced the likelihood of sustained higher interest rates, making holding non-yielding bullion less attractive. US President Donald Trump's more diplomatic approach to Iran, signaling a reduced chance of further attacks, helped stabilize oil prices and further alleviate inflation pressure on the metal.

This, combined with a slightly weaker dollar, made gold more accessible to international buyers. Meanwhile, US employment figures showed a stronger labor market, with job growth accelerating in October and the unemployment rate dropping to 4.1%, supporting expectations of a December rate hike by the Federal Reserve. Traders now consider an 81% probability of a rate increase in December, up from 71% prior to the latest payrolls data.

The upcoming release of US Consumer Price Index data on Tuesday and Producer Price Index data on Friday will provide further insight into the Fed's monetary policy stance. Silver, platinum, and palladium also experienced gains, with spot silver rising 2.5% to $53.15 per ounce, platinum increasing 1.3% to $1,553.23, and palladium climbing 2.1% to $1,045.11.