Gold prices rose during these moments of trading, today, Monday, towards the highest level in a month recorded in the previous session, supported by a slight decline in the dollar index and the possibility that the US Federal Reserve will stop raising interest rates this year.

Gold futures rose 0.23% to $1,971 an ounce.

While spot gold contracts rose by 0.25% to $1,945 per ounce.

On the other hand, the dollar index fell by 0.11% to 104.072 points.

Gold at settlement on Friday

Gold futures prices stabilized at the end of the last session of the week, on Friday, after the unemployment rate increased in the United States during the month of August, raising market expectations regarding the Federal Reserve stabilizing interest rates at the next September meeting.

Futures contracts for the yellow metal for December delivery ended trading on Friday, stable at $1,967.1 per ounce, but achieved gains of 1.4% on a weekly basis.

The jobs report issued on Friday showed that the US economy added 187,000 jobs during August, exceeding expectations of adding only 170,000 jobs, while the unemployment rate in the country rose to 3.8% during the month, after reaching 3.5% in July.

Industrial activity in the United States contracted last month, according to data from the S&P Global Manufacturing Purchasing Managers' Index, for the tenth month in a row, after a period of growth that lasted 28 months.

The seasonally adjusted manufacturing PMI fell to 47.9 points in August from 49 points in July, but it was better than the initial reading of 47 points, so the manufacturing sector has continued to contract every month since November 2022, with the exception of its stability in April.

Gold is at the mercy of interest and bonds

Data on Friday showed that US job growth rose in August, but the unemployment rate jumped to 3.8% and wage gains eased, strengthening expectations for interest rates to hold at current levels at this month's meeting, weighing on the dollar negatively.

“The Fed’s current monetary tightening cycle appears to be starting to impact the US labor market, which could dampen rising inflation expectations,” said Kelvin Wong, senior market analyst at OANDA in Asia Pacific.

According to Investing Saudi Arabia's Fed Rate Tracker, investors now see a 93% chance that the Fed will leave interest rates unchanged at its September meeting.

Since gold does not earn any interest of its own, it tends to lose its appeal when interest rates rise.

“The precious metal will be at the mercy of what happens to Treasury yields before the Federal Open Market Committee meeting in September,” said Tim Waterer, chief trading market analyst at KCM.

Waterer continued: If we see a decline in yields based on interest rate expectations, this will be positive for gold.

While Nobel Prize-winning economist Joseph Stiglitz (OTC:NEBLQ) said in a statement to CNBC, on Friday, that the Federal Reserve did not do its duty, and was wrong in describing the high inflation that the American economy has faced over the past two years.

Cleveland Federal Reserve President Loretta Mester said on Friday, in remarks prepared for a research conference in Frankfurt, that inflation in the United States remains very high despite the recent improvement, noting that the labor market remains strong.

Meister added: Policymakers need to closely monitor markets and economic data to assess how the economy is developing to determine their future policy decisions.

At least seven Fed officials are scheduled to speak this week, ahead of the next policy meeting on September 19-20.

Wong added: On a technical basis, the momentum factor has turned increasingly positive as spot gold has managed to trade above the 50-day moving average for four consecutive sessions, now acting as support at $1,930.

other metals

Spot silver rose 0.3% to $24.24 an ounce, platinum settled at $960.24, while palladium rose 0.5% to $1,223.73.