Gold Holds Steady Near Two-Month High Amid Rate Hike Fears

Gold prices remained steady near a two-month high of around US$4,400 on Monday as traders weighed the impact of cooling US economic data and energy-led inflation pressure on the Federal Reserve's interest-rate path.

The latest US data showed declines in both consumer sentiment and retail sales, easing fears of an imminent rate hike that typically acts as a headwind for non-yielding bullion. However, volatility persisted in the global energy supply outlook, keeping the risk of monetary tightening alive.

Oil prices climbed after the US threatened to impose economic measures on Iran, increasing inflation pressure. The Strait of Hormuz remained a concern, with more ships coming under attack in recent days. Despite this, vessels are exiting the strait, often with satellite transponders turned off to avoid detection.

The minutes of the Federal Reserve's July policy meeting will be released on Wednesday (Aug 19), providing some clarity on rate considerations. Gold's recovery above US$4,000 an ounce in recent weeks has been driven by renewed investor appetite and increased central bank purchases, notably from China.