The price of gold rose on Monday, supported by a weaker dollar, as investors await a series of US economic data, including December’s nonfarm payrolls report, for further guidance on the position of the Federal Reserve regarding interest rates.
Spot gold rose 0.2% to $2,643.69 an ounce by 0229 GMT. U.S. gold futures rose 0.1% to $2,656.80.
“A quiet start to the week from the U.S. dollar helps gold eke out some gains,” said Tim Waterer, chief market analyst at KCM Trade.
Developments in US employment data this week could be the key to gold breaking out of its recent range, he added: “There is a plethora of US data that needs to be be released this week (including ISM Services PMI data), and any deviation to the downside could hurt the dollar and help gold.”
The U.S. jobs report, due Friday, is expected to provide more clues about the Fed’s rate outlook after the U.S. central bank shook markets last month by scaling back its planned 2025 cuts.
Investors are also awaiting ADP data on hiring and job openings, as well as minutes from the Fed’s latest monetary policy meeting, for additional guidance.
Gold thrives in a low interest rate environment and serves as a hedge against geopolitical uncertainties and inflation.
US President-elect Donald Trump is set to take office on January 20 and his proposed tariffs and protectionist policies are expected to fuel inflation.
This could prompt the Fed to slow down rate cuts, which would limit the rise in gold. After three rate cuts in 2024, the Fed has only planned two reductions for 2025 due to persistent inflation.
The U.S. central bank’s benchmark policy rate should remain restrictive until there is greater certainty that inflation is returning to its 2% target, Thomas Barkin, president of the Federal Reserve Bank of Richmond, said Friday.
Spot silver gained 0.2% to $29.67 an ounce, platinum lost 0.5% to $933.60, and palladium fell 0.9% to $920.09.
