FX.co ★ Gold Dips as Dollar Firms

Gold slipped to $4,140 an ounce on Monday, pulling back from two-week highs as the US dollar strengthened. The decline was contained, however, by mounting evidence of a cooling US labor market, which tempered expectations of further interest rate increases from the Federal Reserve.

Data released last week showed a marked slowdown in US job growth in June, alongside downward revisions to employment figures for the previous two months. This weaker labor picture led markets to scale back the likelihood of near-term rate hikes.

In energy markets, oil prices drifted lower as the resumption of energy flows through the Strait of Hormuz, combined with the potential for higher OPEC+ output, stoked fears of an emerging supply glut.

Attention now turns to the Fed’s meeting minutes, scheduled for release on Wednesday. Markets are currently pricing in better than even odds of a rate hike in September. In a report published on Friday, JPMorgan cautioned that demand from key sectors may prove weaker than previously anticipated, likely limiting gold’s advance to around $4,300 an ounce in the third quarter and $4,500 in the fourth.