Gold rises 0.8% as oil retreat eases inflation and rate concerns

Oil decline supports precious metals

Gold prices advanced on August 4 as a sharp decline in oil reduced immediate concerns about energy-driven inflation. Bnews reported that spot gold was up 0.8% at $4,086.36 an ounce as of 18:20 GMT, while US gold futures settled 1.5% higher at $4,152.60 an ounce. The gains came as investors continued to assess the likely direction of US monetary policy.

Oil prices fell more than 5% to their lowest level in three weeks after comments from Qatari and US officials raised hopes that the conflict with Iran could be resolved through negotiations. Such an outcome could improve oil shipments through the Strait of Hormuz, a critical route for global energy supplies. The pullback in oil helped ease inflation expectations and reduced some of the pressure on interest-rate-sensitive assets.

Fed outlook remains the central variable

TD Securities global head of commodity strategy Bart Melek identified lower oil prices as one factor supporting gold. He said the move also improved the interest-rate outlook as short-term yields edged lower. High energy prices can reinforce expectations that the Federal Reserve will keep rates elevated for longer to control inflation, which generally weighs on gold because the metal produces no yield.

New York Federal Reserve President John Williams said on August 4 that he remained optimistic inflation pressures would continue to moderate over time. He also said the Fed would not hesitate to raise rates if inflation failed to decline as expected. The central bank kept rates unchanged at its latest meeting, where the vote reflected differing views. Markets currently assign an approximately 57% probability to a rate increase at the Fed’s September 2026 policy meeting, according to Bnews.

Silver and platinum-group metals outperform

Investors are awaiting further evidence from the US labor market, including the ADP private employment report scheduled for August 5 and the nonfarm payrolls report due on August 7. The releases could influence expectations for inflation, economic activity and the Fed’s next decision. For bullion investors and traders, the interaction between energy prices, bond yields and employment data remains the main short-term driver.

Other precious metals posted larger gains. Spot silver rose 2.8% to $59.82 an ounce, while platinum and palladium each climbed 7.1%, reaching $1,742.63 and $1,354.27 an ounce, respectively. Independent analyst Ross Norman said platinum-group metals were benefiting clearly from the prospect of reduced conflict with Iran. Because these metals are used mainly in industrial production, consumption could recover if geopolitical tensions ease and economic conditions improve. In Vietnam, Saigon Jewelry Company quoted SJC gold in Hanoi at 137 million–140.02 million dong per tael on the afternoon of August 4 for buying and selling, respectively.