Prices of safe-haven gold climbed on Monday on heightened geopolitical tensions in the Middle East and amid expectations of a US rate cut in September, while focus shifted to the Federal Reserve’s policy meeting due later this week.

Spot gold rose 0.4% at $2,394.88 per ounce, as of 0419 GMT. US gold futures firmed 0.5% to $2,393.20.

“Prices will hold a range ahead of the Fed meet and Chair Jerome Powell’s comments. If we get a clearly dovish stance and softer jobs data, prices could head towards $2,450,” said Kelvin Wong, OANDA’s senior market analyst for Asia Pacific.

The US central bank’s Federal Open Market Committee meets on July 30-31 and is expected to keep rates unchanged at 5.25%-5.50%.

However, softer US jobs data in June, cooling inflation and comments from top Fed officials have prompted the rate futures market to fully price in a 25 basis-point cut in September.

The ADP national employment report and non-farm payrolls report are the main data points due this week. Gold, historically reputed for its stability as a favoured hedge against geopolitical and economic risks, thrives in a low-interest rate environment.

Israel’s security cabinet authorized Prime Minister Benjamin Netanyahu’s government to decide on the “manner and timing” of a response to a rocket strike in the Israeli-occupied Golan Heights that killed 12 teenagers and children, and which Israel and the United States blamed on Lebanese armed group Hezbollah.

Gold rises as yields slip after US data lifts rate-cut hopes

Bullion should see further safe-haven demand if things get more heated up in the Middle East, OANDA’s Wong added.

Elsewhere, top consumer China’s gold consumption in the first half of 2024 fell by 5.61% from the same year-ago period, data from the Gold Association showed, as high prices curbed purchases of gold jewellery.

Spot silver gained 0.7% at $28.08 per ounce, platinum rose 1% to $944.70 and palladium was up 1% at $909.13.