Tensions in the Middle East push up oil prices, gold prices weaken slightly, market focuses on US inflation data

1. Gold prices weakened slightly during early Asian trading on Monday, at one point falling 0.6% to around $4,324 per ounce, moving away from last Friday’s seven-week high of $4,371.5 per ounce. Unfavorable progress in US-Iran negotiations over the weekend and a sharp rise in oil prices have intensified inflation concerns and supported expectations of Federal Reserve rate hikes, putting pressure on gold prices. Investors are now waiting for the key US inflation report to be released later this week for clues on interest rates.2. International oil prices continued to climb on Monday, with Brent crude futures rising more than 3% from last Friday’s closing price to $84.77 per barrel, while WTI crude futures rose nearly 3% from last Friday’s closing price to $79.43 per barrel. Uncertainty remains over whether the Strait of Hormuz can reopen in the short term, sustaining market concerns about supply disruptions.3. On Sunday, Iran stated that its agreement with Oman to establish a new navigation channel has entered the “final stage,” but reiterated that the waterway will only reopen if Washington meets other conditions— including compensation for Iran in response to large-scale attacks. Iranian Foreign Minister Aragchi also asserted that Iran will not initiate direct negotiations with the US as long as America continues to violate the interim agreement signed in June.4. In addition, Yemen’s Houthi forces announced on Sunday the launch of a drone attack on Saudi Aramco’s refinery in Jizan.5. Key US inflation data set to be released this week include the Consumer Price Index (CPI) and Producer Price Index (PPI).