Spot gold edged higher on Monday, supported by short covering after a weekly loss on Friday due to the Federal Reserve's cautious stance on rate cuts over the coming year.
Spot gold was up 0.2% at $2,626.44 an ounce, as of 0313 GMT. U.S. gold futures fell 0.1% to $2,642.10.
The Fed's 25 basis point cut on Dec. 18 and the cautious note struck by its economic projections and expectations of fewer cuts in 2025 pushed gold to its lowest level since Nov. 18 last week.
“We are entering the holiday season and gold has been mainly helped by short covering which started on Friday and there is some technical support as well,” said Ajay Kedia, director at Kedia Commodities, Mumbai.
Gold rose on Friday on a decline in the U.S. dollar and Treasury yields as U.S. economic data hinted at slowing inflation. [US/] [USD/]
Data on Friday showed that monthly inflation in the United States slowed in November after little improvement in recent months. The personal consumption expenditures (PCE) index rose 0.1% last month after an unrevised 0.2% gain in October.
San Francisco Federal Reserve President Mary Daly and two other Fed policymakers said Friday they believe the central bank will likely resume rate cuts next year, but will take its time since the “recalibration phase” was over.
The Russian central bank kept the key interest rate at 21% on Friday, surprising the market.
Higher rates reduce the appeal of low-yielding bullion.
Meanwhile, COMEX gold speculators reduced their net long positions by 16,251 contracts to 203,937 in the week to Dec. 17, data showed Friday. [CFTC/]
“I see good support for gold at $2,595 and resistance at $2,664,” Mr. Kedia said.
Spot silver rose 0.7% to $29.72 an ounce and platinum climbed 1% to $935.47, while palladium added 0.2% to $922.31.
