Gold steady with Middle East turmoil, US jobs data in focus

FUNDAMENTALS

Spot gold was steady at $4,055.39 per ounce, as of 0042 GMT. U.S. gold futures rose 0.6% to $4,055.10.U.S. President Donald Trump said that talks with Iran were under way, warning that it was a "last chance" for Tehran to sign a good deal to end the five-month-old war, but Iran denied that any negotiations were being held or planned.

The conflict has driven up energy costs and stoked inflation fears, which could prompt central banks to increase interest rates to keep price pressures in check. While gold is traditionally seen as an inflation hedge, higher rates tend to weigh on the metal since it yields no interest.

Federal Reserve Bank of New York President John Williams said he remained optimistic that inflation pressures are on track to ease gradually, but if they don't the U.S. central bank will not hesitate to respond with rate hikes.

Data on Monday showed that U.S. manufacturing activity increased to the highest level in more than four years in July, though the conflict in the Middle East is straining supply chains and keeping input costs elevated.

Elsewhere, South Korea's central bank will buy gold from local producers to diversify its sources of supply and increase its holdings of the precious metal, it said on Monday.

Spot silver gained 0.1% to $58.24 per ounce, platinum rose 0.4% to $1,633.88, while palladium fell 0.2% to $1,262.00.

DATA/EVENTS (GMT)

1230 US International Trade $ Jun 1400 US Factory Orders MM Jun

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