BENGALURU: Gold prices edged higher on Monday as a lower dollar prompted some short covering from investors with focus turning to US jobs data due later this week that could offer more cues around interest rate cuts by the Federal Reserve. Spot gold was up 0.2% to $2,330.92 per ounce as of 10:02 a.m. ET (1402 GMT). Prices registered a more than 4% gain in the second quarter. US gold futures gained 0.1% to $2,341.60.
The dollar index was down 0.2% against its rivals, making gold attractive for holders of other currencies. “We’re seeing a little bit of short covering by the shorter term futures traders and bargain hunting by the guys in the cash market.
The markets are also being supported by a firm crude oil prices and a weaker US dollar,” said Jim Wyckoff, senior market analyst at Kitco Metals.
“We are probably going to grind sideways here or maybe sideways to lower here for probably the rest of the summers,” Wyckoff added. This week, the focus will be on remarks from the Fed Chair Jerome Powell on Tuesday, followed by minutes from the Fed’s latest policy meeting on Wednesday and US non-farm payrolls data due on Friday. Data last week showed that the US prices were unchanged in May, while consumer spending rose moderately.
“Powell is likely to stick to a data-dependent stance, so should payrolls later this week come in softer, it could again lift gold prices,” UBS analyst Giovanni Staunovo said.
The market now sees a 64% chance of the Fed cutting interest rates in September as well as another cut in December. Lower interest rates reduce the opportunity cost of holding bullion.
Elsewhere, spot silver rose 0.8% to $29.35, platinum slipped 0.6% to $987.05 and palladium gained 1.3% to $985.
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