A360
Key Takeaways✦ Atlas AI
01
Gold prices rose 0.5% to $4,541.39/ounce.
02
Inflation fears from high oil prices limited gains.
03
Traders now expect potential U.S. rate hikes.
Atlas AI
Gold prices rose on Tuesday, May 5, rebounding from a more than one-month low hit in the prior session, as renewed Middle East tensions lisourcesed demand for perceived safe-haven assets.
Spot gold was up 0.5% at $4,541.39 per ounce by 0230 GMT, asourceser falling more than 2% on Monday to its lowest level since March 31. U.S. gold futures for June delivery rose 0.4% to $4,550.70.
Gains were capped by persistent inflation concerns tied to elevated oil prices and a stronger U.S. dollar. Brent crude hovered above $113 a barrel as the U.S. and Iran traded fresh attacks on Monday over the Strait of Hormuz.
Higher crude prices can stoke inflation and increase the likelihood of higher interest rates. That can weigh on gold, which does not offer a yield, by making yield-bearing assets more attractive.
Markets have largely priced out U.S. Federal Reserve rate cuts this year. Traders were pricing a 37% chance of a rate hike by March 2027, compared with a 27% probability of a rate cut a week earlier.
Investors are awaiting key U.S. economic data this week, including job openings, the ADP employment report and the April payrolls report, for further direction.
