Gold Prices Steady Amid Middle East Tensions and Fed Rate Hopes

Gold prices have remained steady as investors continue to monitor developments in the Middle East and await key US jobs data that could provide clues on the Federal Reserve's interest-rate path.

The conflict between the US and Iran has driven up energy costs and stoked inflation fears, which may lead central banks to increase interest rates to keep price pressures under control. However, higher interest rates tend to weigh on gold since it yields no interest.

According to current market expectations, there is a 65% chance that the Fed will raise rates in September after its last policy meeting left rates unchanged. Federal Reserve Bank of New York President John Williams stated that he remains optimistic about inflation pressures easing gradually, but if they don't, the central bank won't hesitate to respond with rate hikes.

The week ahead is packed with several labor market reports, including US job opening data due later in the day, the ADP employment report on Wednesday, and Friday's nonfarm payrolls figures. Additionally, South Korea's central bank will buy gold from local producers to diversify its sources of supply and increase its holdings of the precious metal.