FX.co ★ Gold Advances as Oil Prices Retreat

Gold rose above $4,100 per ounce on Monday, building on last week’s rally as falling oil prices helped ease inflation concerns. However, expectations of a more hawkish Federal Reserve limited further gains.

Oil prices extended their decline after President Donald Trump said it was “highly unlikely” he would authorize additional strikes on Iran, provided negotiations over its nuclear program and the reopening of the Strait of Hormuz make substantial progress.

On the macroeconomic front, US data released Friday showed that job growth accelerated in October, while the unemployment rate edged down to 4.1%. The figures underscored the strength of the labor market and reinforced expectations of a possible Fed rate hike in December.

Markets are now pricing in roughly an 81% chance of a quarter-point rate increase before year-end, up from 71% prior to the employment report. Investors are turning their focus to key US inflation data due this week for further signals on the Fed’s policy trajectory.