Gold extends gains on lower oil and softer dollar, market…

On August 5, gold prices rose for the third consecutive session, supported by a weaker dollar and declining oil prices. Spot gold increased by 1.3% to $4,127.04 per ounce, while U.S. gold futures rose by 0.8% to $4,184.40. The subdued dollar made gold more appealing to international investors. The decline in oil prices is expected to alleviate inflation pressures, which typically influence interest rate forecasts. Market analysts noted that gold's value is closely linked to oil prices, and a stable geopolitical situation could drive prices higher. Meanwhile, traders anticipate a 59% chance of a Federal Reserve interest rate hike in mid-September, slightly down from 67%. Other precious metals also showed gains, with silver up 1.9% and platinum rising to its highest level since June.

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Granules of gold and silver are seen in glass jars at the Krastsvetmet non-ferrous metals plant in Krasnoyarsk

An employee displays one kilogram gold bars at the Korea Gold Exchange in Seoul

One kilogram gold bars are seen in this picture illustration taken at the Korea Gold Exchange in Seoul

Item 3 of 3 One kilogram gold bars are seen in this picture illustration taken at the Korea Gold Exchange in Seoul August 9, 2011. REUTERS/Jo Yong-Hak/File Photo

[3/3] One kilogram gold bars are seen in this picture illustration taken at the Korea Gold Exchange in Seoul August 9, 2011. REUTERS/Jo Yong-Hak/File Photo Purchase Licensing Rights, opens new tab

Summary
Oil steadies after two-day slump
Qatar says mediators make progress in efforts to end war
Fed's Paulson keeps 'open mind' on rate policy outlook

Aug 5 (Reuters) - Gold rose for a third straight session on Wednesday, helped by a ‌softer dollar and lower oil prices, while investors awaited U.S. jobs data for clues on the interest-rate outlook.

Spot gold was up 1.3% at $4,127.04 per ounce, as of 0253 GMT. U.S. gold futures rose 0.8% to $4,184.40.

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The U.S. dollar remained subdued, making greenback-priced metals more attractive to holders of other currencies.

Oil steadied after steep falls in the ⁠previous two sessions. Lower oil prices can ease inflation concerns that often feed expectations of higher interest rates.

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Qatar said mediators were making progress in efforts to end the U.S.-Iran war, although Tehran has denied U.S. President Donald Trump's assertion that talks are already underway.

"Gold's relation with oil is still intact as oil prices have a tremendous impact on the global economy in terms of inflationary pressure. If we get a very clear roadmap to further de-escalation in tensions, gold prices could move higher," said Kelvin Wong, a senior market analyst ‌at ⁠OANDA.

Traders are now pricing in a 59% probability of a Federal Reserve interest rate hike at the central bank's September 15-16 meeting, down from 67% a day earlier.

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Gold tends to lose its appeal in a high interest-rate environment despite its status as an inflation hedge, as it yields no ⁠interest.

Federal Reserve Bank of Philadelphia President Anna Paulson said she was keeping an "open mind" about what lies ahead for monetary policy in an outlook that could call for higher rates.

Traders were looking ahead to the ⁠ADP employment report due later in the day and the July payrolls report scheduled for Friday.

Analysts at TD Securities said in a note that they expect gold to remain ⁠range-bound near current levels.

Spot silver gained 1.9% to $60.64 per ounce and platinum climbed 1.4% to $1,758.35, its highest level since mid-June. Palladium rose 0.9% to $1,365.62, up for a second straight session.

Reporting by Ashitha Shivaprasad in Bengaluru; Editing by Rashmi Aich and Subhranshu Sahu

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Ashitha Shivaprasad

Thomson Reuters

Ashitha covers the commodity landscape, with increased focus on precious metals, minor metals, and agricultural commodities.

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