Gold prices rose on Monday following a
pullback in the dollar and U.S. Treasury yields, while investor
focus shifted to U.S. inflation data for clues on the Federal
Reserve’s rate hike plan.
Spot gold rose 0.8% to $1,787.39 per ounce by 2:25
p.m. ET (1825 GMT). U.S. gold futures also settled up
0.8% at %1,805.2.
The dollar index fell 0.2%, making gold more
appealing to other currency holders. U.S. Treasury yields also
Gold is considered a safe investment amid political tensions
and recession worries, but high interest rates tend to dim the
appeal for bullion, which pays no interest.
“The market seems to have priced in the shock from the jobs
number … however, gold will have a tough time if the Fed is
seeing tightening much further,” said Edward Moya, senior
analyst with OANDA.
“Foreign investors are going to be looking for alternative
investments and gold is an option with the ongoing situation in
Taiwan and Ukraine.”
Gold fell on Friday after robust U.S. job growth reinforced
expectations that the Fed will continue to raise rates in the
next few meetings to slow inflation. [nL4N2ZH397
With gold’s gains capped by the potential of more aggressive
hikes, the strength of technical support around $1,700 will be
tested when the Fed’s next decision is announced, Kinesis Money
analyst Rupert Rowling said in a note.
The U.S. consumer price index report due on Wednesday could
offer clues on the Fed’s next move.
Spot silver rose 3.7% to $20.60 per ounce, while
platinum was up 0.5% to $937.0.
Palladium jumped 5.6% to $2,245.68.
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