Gold prices turn higher as oil prices pare gains, easing some inflation jitters By Investing.com

Investing.com– moved higher on Monday, recovering after hitting their lowest level in 11 weeks, after media reports said that Iran and Israel had halted attacks.

In the wake of the news, pared back gains, easing some fears of an energy-induced inflation surge that could lead to higher-for-longer interest rates. Still, these concerns remained in play following a robust U.S. jobs report last week.

Meanwhile, the weakened slightly, after surging to a two-month high in the previous session. The greenback has largely strengthened since the outbreak of the Iran war in late February, underpinned by the belief that the U.S. economy, as a major energy exporter, may be insulated from the crisis. A firmer dollar, in turn, can make gold more expensive for overseas buyers.

Investors are now gearing up for the release of monthly consumer and producer price data from the U.S. later this week, which could offer a glimpse into the state of inflationary pressures.

was last up 0.3% at $4,343.70 an ounce by 09:43 ET (13:43 GMT), after having touched its lowest level since March 23. Gold futures, meanwhile, were mostly unchanged at $4,363.30 an ounce.

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The precious metal slipped more than 3% on Friday as investors reassessed the outlook for U.S. monetary policy following the stronger-than-expected labor market data. The figures showed the U.S. economy added 172,000 jobs in May, well above economists’ forecasts, while the unemployment rate held steady at 4.3%.

The report bolstered bets on a potential Fed interest rate hike this year, pushing higher. This may not bode well for gold, a non-yielding asset that tends to underperform in an elevated rate environment. 

“Despite the lack of consistent messaging in the labor market data, we now have a rate hike fully priced at the December FOMC meeting,” ING analysts said in a note.

Iran’s armed forces have announced the end of military operations against Israel, according to the state-run Fars news agency.

The report came after Iran and Israel exchanged fresh strikes that extended into Monday, threatening to collapse a fragile U.S.-brokered ceasefire and diminish the likelihood of a broad Middle East peace deal.

The strikes marked the first time that Iran and Israel have attacked each other since the shaky truce took effect in April.

Media reports said the latest exchange began with an Israeli strike on the Lebanese capital of Beirut. Israel has been fighting Iran-backed Hezbollah militants in Lebanon, although the conflict has not recently escalated beyond low-key skirmishes. Tehran then responded with attacks of its own, sparking a retaliation from Israel that its military says hit targets in central and western Iran.

(Ayushman Ojha contributed reporting)