WASHINGTON (dpa-AFX) - Gold prices are nearly flat on Monday amid concerns about the chances of a high interest-rate environment in the U.S. in the near-term due to oil-linked inflationary pressure while investors assessed reports hinting at the possibilities for peace talks between the U.S. and Iran.
Front Month Comex Gold for August month delivery has ticked lower by $3.60 (or 0.09%) to $4,015.20 per troy ounce.
However, the Front Month Comex Silver for August month delivery has soared by $0.745 (or 1.33%) to $56.878 per troy ounce.
The renewed conflict between the U.S. and Iran continues, with the U.S. attacking Iran for the ninth straight day.
Yesterday, U.S. Secretary of State Marco Rubio stated that the U.S. is receiving indications through multiple channels that Iran wants to negotiate. Market sentiments got a mild boost after Iran confirmed Rubio's message.
Iranian news agency IRNA reported that Iran confirmed receiving proposals and recommendations from several mediators for easing the tension with the U.S. and preventing the situation going out of control.
Iran's Foreign Ministry Spokesman Esmaeil Baghaei, who confirmed the news, also stated that while Iran is fighting U.S. aggression, diplomatic efforts have not been spared and termed both measures as indispensable.
Meanwhile, the U.S. expanded aerial offensives against Iran while Iran targeted Bahrain, which hosts the U.S. navy's fifth fleet, and Kuwait.
As a result of the closure of the Strait of Hormuz which Iran announced as shut after the recent breakout of the U.S.-Iran conflict, shipping traffic has largely trickled.
Despite the relentless exchange of attacks, the rise in oil prices was limited with diplomatic measures continuing to be pursued by both the nations through intermediaries.
However, persisting inflation concerns have reinforced expectations that U.S. interest rates will remain higher for an extended period of time.
Compounding the distress to the shipping sector in the Middle East besides the disruption across the Strait of Hormuz, the Iran-backed Houthi militia of Yemen threatened a naval blockade on Saudi Arabia, raising concerns of a threat to the Red Sea shipping route.
The U.S. dollar index was last seen trading at 100.95, up by 0.19 (or 0.19%) today.
According to the CME Group's FedWatch Tool, investors are currently betting on a 16.60% chance of a quarter-basis-point interest rate-hike in the upcoming meeting of the U.S. Federal Reserve on July 28-29, while the odds on rates being held at the current level stand at 83.40%.
Separate reports from the World Gold Council and Goldman Sachs indicated that central banks around the world are accelerating their gold purchases to increase their holdings.
While the annual net gold purchases have reached about 1,000 tons in recent years according to the WGC, purchases in May 2026 alone totaled 81 tons according to Goldman Sachs. The global bank major observed that China bought 48 tons via the London OTC market in May, roughly five times more than the officially reported 10 tons.
Both these estimates show that gold buying and demand for safe-haven assets are pacing up.
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