(RTTNews) – Gold prices traded lower on Wednesday as investors weighed U.S.-Iran tensions and awaited key U.S. economic data for additional clues on the outlook for U.S. monetary policy.
Spot gold dipped 0.7 percent to $3,981 an ounce, after having fallen 12 percent in June, its largest monthly drop since 2008 and fourth straight monthly loss on rising interest-rate expectations and a stronger dollar. U.S. gold futures were down more than 1 percent at $3,995.85.
American and Iranian officials are in Qatar, but Iran said it would not meet with top U.S. envoys, raising fresh concerns over the fragile interim ceasefire between the two nations.
Renewed exchanges of fire over the weekend have also dampened expectations of a durable truce. It appears the two sides are far apart on key pillars of the initial framework they signed two weeks ago.
Iranian Parliament Speaker and chief negotiator, Mohammad Bagher Ghalibaf, said Iran will not enter negotiations with the United States on a final agreement unless certain preliminary paragraphs of a recently signed pace memorandum of understanding are fulfilled.
He also claimed that Israel is desperately trying to destroy a new 14-point MoU between Tehran and Washington.
Elsewhere, Lebanon’s power parliament speaker Nabih Berri, an ally of Hezbollah, vowed to block the ratification of a separate, controversial U.S.-mediated framework deal between Lebanon and Israel in parliament.
Meanwhile, investors have shifted their focus to labor market data alongside upcoming remarks from Federal Reserve Chair Kevin Warsh later today at the annual European Central Bank Forum in Sintra, Portugal.
Investors will be attentive to how he frames the inflation and growth outlook as global oil supply risks ease.
The June ADP employment data, due later in the day, and nonfarm payroll figures on Thursday, may provide fresh insights into the Fed’s rate path going forward.
Federal Reserve Bank of Cleveland President Beth Hammack warned on Tuesday that inflation is “still too high” and that she’ll advocate for higher interest rates if inflation pressures fail to ease.
Markets currently price in roughly a 67 percent chance of a rate hike for September, according to the CME FedWatch Tool.
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