Gold prices traded slightly higher early Monday, recovering from weekly lows to retest the US$2,650 level. The rebound comes amid escalating geopolitical tensions in the Middle East and cautious market sentiment ahead of key U.S. inflation data.
By 3:50 pm AEDT (4:50 am GMT) spot gold added $3.53 or 0.1% to US$2,636.34 per ounce.
Syrian rebels captured the capital, Damascus, ousting President Bashar al-Assad, who reportedly fled to Russia with his family. The overthrow marks the end of a 13-year civil war and over 50 years of Assad family rule.
In response, the United Nations (UN) is expected to hold an emergency closed-door meeting on Monday to address the crisis. Despite last week’s ceasefire agreement between Israel and Hezbollah, tensions in the region remain high, adding to gold's appeal as a safe-haven asset.
In the U.S., market focus shifts to the consumer price index (CPI) data due this week. Friday’s nonfarm payrolls report revealed a stronger-than-expected gain of 227,000 jobs in November, exceeding the forecast of 200,000.
Despite the robust jobs report, the market's anticipation of a Federal Reserve interest rate cut this month has surged to over 85.1%, as indicated by the CME Group's FedWatch Tool.
In Asia, traders are also eyeing developments in China, where continued weak inflation figures have fuelled expectations for further economic stimulus.
China’s consumer price index (CPI) rose by 0.2% year-on-year in November, below the 0.3% recorded in October, reinforcing concerns over subdued domestic demand.