Gold is trading in positive territory this Monday, 9 June, supported by a decline in oil prices and an advance in global equities that is reducing pressure on investors to sell the precious metal. Even so, the commodity continues to trade within a relatively narrow range.

In morning trade, gold advanced 0.5% to $4,090.97 per ounce, having earlier accelerated as much as 1.6% to $4,130 per ounce overnight. This marks a reversal from the previous session, when a stronger-than-expected US labour market reading gave the Federal Reserve (Fed) ammunition to tighten interest rates in December.

However, with oil prices continuing a downward trajectory that pushed crude to its worst week since April 2020, investors are reassessing the steps the central bank is likely to take over the coming year. For now, the swaps market is pricing in two further interest rate increases by the end of 2027, though much will depend on the impact that rising energy prices may have on inflation in the months ahead.

“Political uncertainty is acting as a buffer for gold prices, while shifting expectations around the Federal Reserve and Treasury yields are capping any recovery,” said Hebe Chen, market analyst at Vantage Global Prime, speaking to Bloomberg.

Investor attention is now turning to the release of the US Consumer Price Index (CPI) for October, due on Tuesday. “The CPI report will be the next battleground, testing whether demand for safe-haven assets can gather enough strength to break through the dollar ceiling,” Chen added.