Gold prices rose on Monday, supported by a weaker dollar and lower oil prices, as investors awaited key US inflation data due this week for clues about the Federal Reserve’s next monetary policy move.
By 02:53 GMT, spot gold was up 0.3% at $4,206.01 an ounce, after reaching its highest level since October 2 earlier in the session. US gold futures for December delivery rose 0.3% to $4,230.40 an ounce.
Tim Waterer, chief market analyst at KCM Trade, said, “The decline in oil prices following reports of Trump’s announcement of an energy ceasefire between Russia and Ukraine, combined with the weaker dollar, has provided room for gold to rise.”
“With oil prices falling, some of the immediate concerns over inflation and interest rates in the market are fading, supporting gold from a yield perspective,” he added.
US President Donald Trump unexpectedly announced an energy ceasefire between Russia and Ukraine on Sunday, saying it was “effective immediately.” Ukrainian President Volodymyr Zelenskyy, however, said he was still waiting to see the details of the agreement. Oil prices fell amid expectations of increased Russian supplies.
The dollar was steady, making dollar-denominated gold less expensive for buyers holding other currencies.
While gold is generally viewed as a hedge against inflation, higher interest rates tend to reduce the appeal of the non-yielding asset.
Markets are now awaiting the US Consumer Price Index report on Wednesday, followed by the Producer Price Index and retail sales data on Thursday.
According to CME Group’s FedWatch Tool, traders see a 17% probability of an interest-rate hike in October and an 86% probability of a hike by December.
Among other precious metals, spot silver rose 0.5% to $61.12 an ounce, platinum gained 1% to $1,704.70, and palladium increased 1.2% to $1,161.81.
Source: Reuters
