Gold hovered just below $5,000 per ounce on Monday after two consecutive weeks of declines, while oil extended its rally following a US strike on Iran’s main oil export hub at Kharg Island over the weekend, intensifying concerns over global supply. The attack triggered retaliatory strikes by Tehran against Israel and energy infrastructure in several other Arab countries. The US-Israeli war on Iran has now entered its third week with no clear resolution in sight, unsettling financial markets.
Rising energy prices and mounting inflationary pressures have dampened expectations that the US Federal Reserve and other major central banks will move to cut interest rates, creating a headwind for non-yield-bearing precious metals. The Fed is widely expected to leave its policy rate unchanged at its meeting this week, while central banks in the Eurozone, the UK, Japan, Switzerland, Australia, Canada, China, Brazil, and Russia are also scheduled to set monetary policy.