Gold slips as focus remains on Middle East, rate outlook

According to Business Recorder, spot gold slipped to $4,362.60 an ounce, a 0.3% decline, by 0417 GMT on Monday, after touching a one-week peak on Friday. US gold futures were 0.6% lower at $4,400.20. Investors weighed new threats between Iran and the United States, and what the tensions could mean for inflation and interest rates.

Several major central banks are raising rates to combat inflation linked to the Iran war. The Bank of Japan tightened on Friday, the latest big bank to do so, after the Federal Reserve raised rates earlier that week and the European Central Bank acted the week before. Higher interest rates generally weigh on gold, since they make interest-bearing assets more attractive, even though investors often view it as a hedge against inflation.

Analysts at Standard Chartered said gold remains volatile but still has firm support from official-sector buying. They added that the factors supporting higher prices remain in place, although the pace is slower. Among other metals, silver gained 0.2%, reaching $66.37, while platinum eased 0.1% to $1,798.31 and palladium rose 0.6% to $1,309.65.