Gold bounces 0.7% to $3,900.90 after 3.5% slide below $4,000
Gold climbed 0.7% to $3,900.90 an ounce on Monday, a day after bullion slid 3.5% to a one-year low and broke below the $4,000 mark, as softer oil prices eased inflation worries and traders weighed fresh Federal Reserve commentary.
US gold futures for December delivery added 0.3% to $3,909.70. The previous session's selloff came as a slump in technology stocks forced the sale of safe-haven assets and triggered margin calls. Oil fell more than 3% after Iranian negotiators were in Doha for a third straight day of talks with Qatari mediators aimed at ending the US-Israeli war on Iran.
"We're just getting a bounce after the selloff, along with oil prices coming off to start the week, which is providing a little bit of a relief for precious metals generally," said Kyle Rodda.
Higher energy prices tend to raise expectations that the Fed will hold rates higher for longer, lifting the opportunity cost of holding non-yielding bullion. Three Fed officials argued on Friday for further rate increases to fight high inflation, the first comments since last week's meeting left borrowing costs unchanged. Traders price about a 73% chance of a December hike, according to the CME's FedWatch Tool.
"Gold faces a difficult near-term environment in which technical selling and liquidity concerns are overshadowing its longer-term investment appeal," said Ole Hansen, head of commodity strategy at Saxo Bank, in a note. Spot silver rose 1.8% to $49.97, platinum gained 0.1% to $1,432.63 and palladium held at $976.31.
