Gold prices rose on Monday, supported by a weaker U.S. dollar after a weaker-than-expected jobs report revived expectations the Federal Reserve will cut interest rates this year.
Spot gold was up 0.8% at $2,320.33 an ounce by 0952 GMT. U.S. gold futures gained 0.9% to $2,329.10. “On Friday we saw a decline in new job creation in the United States, a larger slowdown than expected, and wage growth also slowed, creating some space for the Fed to start cutting rates in 2024,” said Ricardo Evangelista, principal analyst at ActivTrades.
The U.S. dollar hit its lowest level in about a month after the jobs report showed U.S. job growth slowed more than expected in April and annual wage growth fell below 4% for the first time in almost three years.
The data pushed bets on an interest rate cut in September to 71%, according to the CME’s FedWatch tool. Lower interest rates reduce the opportunity cost of holding bullion and weigh on the U.S. currency, in which the price of gold is fixed.
“With several Fed officials scheduled to deliver public speeches this week, gold traders will be eager to learn more about the central bank’s monetary policy trajectory,” Evangelista said, adding that tensions in the Middle East are also a supporting factor.
The Israeli army called on Palestinian civilians to evacuate Rafah in a limited-scope operation.
On the technical side, the first near-term hurdle gold bulls face is likely the near-term resistance zone of $2,350/$365, said Kelvin Wong, senior market analyst for Asia- Pacific at OANDA.
“If gold breaks above this zone, the next immediate resistance will be at $2,420 (the current all-time high) and initially at $2,450.
Spot silver rose 2.3 percent to $27.14 an ounce, platinum gained 1.4 percent to $968.50 and palladium rose 1.1 percent to $956.25.
