European shares inched up on Monday, led by basic resources stocks as gold prices advanced, while easing expectations of a Federal Reserve rate hike supported sentiment.
The pan-European STOXX 600 (.STOXX) was up 0.1% at 658.51 points, as of 0823 GMT.
Basic resources (.SXPP) were up 1.1%, with Antofagasta (ANTO.L), Hochschild Mining (HOCM.L) and Fresnillo (FRES.L) up between 1.9% and 2.3%. Gold was up 0.4% after softer-than-expected U.S. economic data and a weaker dollar.
Technology stocks (.SX8P) also added to gains, up 1%.
On Friday, Goldman Sachs raised its 12-month target for the STOXX 600, forecasting the pan-European benchmark to reach 695 points from 660 previously, implying about 5.5% upside from current levels, citing resilient economic growth and strong corporate earnings.
With a strong European earnings season largely in the rearview mirror and second-quarter profit expectations rising steadily, investors have shifted their focus back to macroeconomic and geopolitical developments in search of the next market catalyst.
"There's a divergence between Europe and the U.S., with U.S. data softening while European data remains relatively strong, which should support European markets now that the earnings season is largely over. The focus is increasingly shifting to central bank decisions in September," said Andrea Cicione, head of research at TS Lombard.
Friday's soft U.S. retail sales data reinforced expectations that the Federal Reserve will keep interest rates on hold next month, while money markets are pricing in roughly an 84% chance of a 25-basis-point European Central Bank rate hike in September, according to LSEG data.
On the geopolitical front, Iran called on the U.S. to accept defeat on Saturday, while President Donald Trump blasted Tehran as "very evil" and told Americans to prepare for continued high fuel prices as a result of the war.
Energy sector (.SXEP) jumped 0.1% as crude prices advanced.
On the flip side, food and beverages (.SX3P) was the worst-performing sector, falling 1.1%.
Among individual stocks, Accelleron (ACLN.S) climbed 9.4% after Berenberg upgraded the Swiss turbocharger maker to "buy" from "hold", citing stronger medium-term growth outlook.
