Gold trades near seven-month low; silver drops 3%

Gold and silver prices remained under pressure on Wednesday (July 1), extending recent declines amid cautious sentiment in global markets. COMEX gold was trading at $3,993 per ounce, down $45.50 or 1.13%, while COMEX silver fell 2.93% to $57.735 per ounce in the latest trade.Gold prices weakened after touching a seven-month low in the previous session, as uncertainty surrounding the prospects of a lasting US-Iran peace agreement added to inflation concerns and reinforced expectations that the US Federal Reserve may maintain a tighter monetary policy stance.

Market sentiment remained cautious after Iranian officials indicated there would be no immediate meeting with senior US envoys following recent regional tensions. Tehran also stated that unresolved ceasefire conditions signed earlier remain a key issue before broader discussions on its nuclear programme can progress.
Investors also assessed comments from Federal Reserve Bank of Cleveland President Beth Hammack, who said further rate increases could still be considered if inflation pressures remain elevated. The remarks supported expectations of tighter monetary policy, with traders currently pricing in around a 67% probability of a Federal Reserve rate hike in September, according to the CME FedWatch Tool.Attention now shifts to upcoming US economic indicators, including the June ADP employment report later in the day and nonfarm payrolls data scheduled for Thursday. These releases are expected to provide additional clarity on the Federal Reserve’s interest rate outlook and could influence near-term movement in bullion prices.

Market participants will also monitor key economic data releases later in the session, including the Eurozone manufacturing PMI and inflation figures, along with US manufacturing PMI and ISM data, for broader cues on global economic conditions and monetary policy direction.

-With Reuters inputs