Gold gains more than 1% as softer oil prices ease inflation worries

Gold rose more than 1% on Monday ‌as softer oil prices eased inflation concerns, while investors awaited key US inflation data and fresh signals from the Federal Reserve on its policy outlook.

Spot gold climbed 1.6% to $4,129.69 per ounce by ​0220 GMT, while US gold futures for December delivery rose 1.6% to $4,139.00. Bullion gained ​about 5% last week.

Oil prices fell after US President Donald Trump said ⁠he was highly unlikely to order further attacks on Iran as talks to end the ​conflict continued, easing concerns about potential supply disruptions.

Lower oil prices can ease inflationary pressures and ​reduce expectations that interest rates will stay higher for longer, lowering the opportunity cost of holding non-yielding bullion.

"Trump's more conciliatory tone toward Iran is helping keep a lid on oil prices, which in ​turn eases some of the inflation pressure that had been weighing on the metal ​along with a modest pullback in the dollar," said Tim Waterer, chief market analyst at KCM ‌Trade.

The US ⁠dollar softened, making greenback-priced bullion more affordable for buyers overseas.

Meanwhile, US job growth accelerated in October and the unemployment rate fell to 4.1%, reinforcing expectations that the labour market remains resilient and keeping the Fed on track for a December interest-rate increase.

Traders currently see a ​79% chance that the ​Fed will raise ⁠rates in December, up from 71% prior to the payrolls data, according to CME's FedWatch tool.

Market participants now await the US ​Consumer Price Index data due on Tuesday and the Producer Price ​Index on ⁠Friday to further gauge the Fed's monetary policy stance.

"Any hot readings would likely firm the dollar and lift the odds of a December rate hike, which would quickly put gold ⁠back ​on the defensive," Waterer said.

Among other metals, spot silver ​climbed 2.8% to $53.31 per ounce, platinum gained 1.6% to $1,556.14 and palladium rose 2.1% to $1,044.28.