Gold retreats as oil prices drop before Trump-Putin talks

Gold declined on Monday, with a stronger dollar helping halt the bullion rally after briefly breaching the USD3,400 mark earlier, while oil prices also fell amid uncertainty before US-Russia peace negotiations.

Spot gold was quoted at USD3,354.08 an ounce on Monday afternoon in London, down from USD3,386.08 at the same time on Friday. Silver slid to USD37.75 an ounce from USD38.31.

The yellow metal touched USD3,405 an ounce on Monday, briefly rising past the USD3,400 level. On Friday it hit an intraday best of USD3,408.

Last week, gold registered second consecutive weekly gain.

The rally was fueled by a report that the US has imposed new tariffs on one-kilo gold bar imports, a move that threatens to disrupt the global bullion market, Naga analyst Frank Walbaum said.

The FT said on Friday gold bars weighing one kilogram and 100 ounces have been classified as subject to tariffs by the US Customs Border Protection agency.

"Broader concerns over the global economic outlook, coupled with weak US data, have spurred bets on an imminent Federal Reserve interest rate cut, further boosting gold's safe-haven appeal," Walbaum said.

In the US, the consumer price inflation report for July is scheduled for release on Tuesday, and the producer price inflation data also for July is due out on Thursday.

The market sentiment is leaning heavily towards a more accommodative US monetary policy, with market participants now pricing in an 89% probability that the Fed will cut its interest rates by 25 basis points in September, Naga's Walbaum said, with markets expecting three rate cuts by the end of the year.

Bullion pulled back due in part to a slight rebound in the dollar and rising risk appetite in global markets, XS.com analyst Rania Gule said.

The dollar index was at 98.29 points on Monday, up from 98.24 at the time of the JSE close on Friday.

The continued strength of greenback, even if limited, puts pressure on dollar-denominated commodities, including gold, and delays gold's ability to hold above the key psychological level of USD3,400, Gule said.

Despite gold's weakness, the XS.com analyst maintained that the broader picture remains supportive for gold in the second half of 2025, with expectations of continued moderate inflation, slower US economic growth, and increased central bank gold buying.

In other metals, platinum was priced at USD1,308.39 an ounce on Monday, down from USD1,317.50 on Friday. Palladium was quoted at USD1,125.25 an ounce, down from USD1,133.78.

The copper price rose to USD9,768.00 per tonne from USD9,702.00. But aluminium fell to USD2,610.50 from USD2,619.00.