Gold Steady Near $4,376 as US Slowdown Signals Counter Mideast Inflation Fears

Gold was little changed as signs of a slowing US economy eased concerns over higher interest rates, while Middle East tensions kept energy-driven inflation worries in focus.

Spot gold traded at $4,376 an ounce as of 7:24 a.m. in Singapore on Aug. 16, little changed from the previous session, Bloomberg reported. Bullion rose about 1% last week.

Recent US economic data has weakened, tempering concern that the Federal Reserve could raise rates sooner. US consumer sentiment deteriorated, and retail sales also fell. Higher rates typically reduce gold's appeal because the metal does not pay interest.

At the same time, uncertainty over Middle East energy prices makes it difficult to fully rule out further rate increases. Additional attacks targeting ships in the Strait of Hormuz were reported late last week, and the US is also preparing new sanctions to pressure Iran's economy.

Uncertainty surrounding the Strait of Hormuz persists. Some vessels have reportedly been leaving the strait with their Automatic Identification System, or AIS, switched off to avoid detection. Iran and Oman are nearing an agreement on managing traffic through the waterway, but the US is not participating in the talks.

Markets are now focused on minutes from the Fed's July Federal Open Market Committee meeting, due on Aug. 19. The minutes may offer a clearer view of the Fed's internal thinking on the future path of rates.

Gold recently reclaimed the $4,000-an-ounce level, helped by a recovery in investment demand and increased buying by central banks including China's. Last week, it rose above its 100-day moving average for the first time since April and remains near that level.

At the same time, silver rose 0.6% to $65.08 an ounce. Platinum and palladium also gained, while the Bloomberg Dollar Spot Index fell 0.1%.