Gold traded near $4,200 an ounce on Monday, holding onto last week’s gains as weaker-than-expected US jobs data and lower oil prices led traders to scale back expectations for Federal Reserve interest rate hikes.
Oil prices edged lower as recovering energy flows through the Strait of Hormuz and the prospect of increased OPEC+ supply fueled concerns about a potential glut.
That has helped ease inflationary pressures that had previously heightened fears of further rate hikes and weighed on non-yielding gold.
Meanwhile, data released last week showed US nonfarm payrolls increased by just 57,000 in June, the smallest gain in four months and well below forecasts of 110,000, prompting traders to reduce their bets on a September rate hike.
According to the CME FedWatch tool, the probability of a hike fell to 50%, down from 66% before the report.