Gold eased after a down week as the Hormuz stalemate kept energy costs elevated and left the Fed under pressure to lean tougher on sticky inflation. By 7:56 a.m. in Singapore, spot prices were down 0.5% at $4,261.59 an ounce, while bullion sat near $4,265. This month, prices have moved within a narrow $4,230-$4,510 corridor, remaining far below January's nearly $5,600 peak.
Crude moved higher after Iran said it will not relax the conditions for reopening the key waterway, following President Trump's rejection of a seven-day proposal. He told Axios he expects negotiations to restart this week. The US-Iran conflict is now entering its eighth month, and Brent is up 70% this year. The dollar added to the headwind for metals too, with the Bloomberg Dollar Spot Index up 0.1% after a 2% rise since the month began.
Cleveland Fed President Beth Hammack said Friday that rising long-term Treasury yields reflect a sturdier growth outlook, concern over government debt, and expectations for further rate increases. Mid-month, policymakers unanimously raised the benchmark rate by 0.25 percentage point, and since then several officials have pointed to signs that additional hikes may be needed. Investors peg the odds of another move in October at about 65%.
At the same time, a four-month low was recorded for US consumer sentiment in September. In the Treasury market, the 10-year minus 2-year spread compressed last week to just 17 basis points, the tightest since early 2025, a curve move that heightens the risk of long maturities dipping below short ones - a widely watched recession signal.
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Silver slipped 0.8% to $63.77 after a 3% weekly drop, and platinum and palladium also edged lower. Dealmaking is still humming even with prices boxed in, as South Africa's Gold Fields Ltd. approached Northern Star Resources Ltd., Australia's biggest gold miner, with a potential blockbuster acquisition that Northern Star rejected on Monday. With oil firm, the dollar sturdier, and the Fed signaling it is not done yet, gold's narrow trading range could stick around a bit longer, which means more short bursts of volatility as markets keep recalibrating the path for inflation and rates.
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