Gold prices rose globally during these moments of trading, today, Monday, after mixed signals from economic data in the United States, as optimism is increasing, and the economy is heading towards a soft landing while the Federal Reserve fights inflation.
The precious metal fell as much as 0.4% on Monday before reversing, as it closed Friday with weekly losses.
Investors will be looking at the political situation in the Middle East and how the ongoing negotiations for a ceasefire will play out, said Kelvin Wong, senior market analyst for Asia-Pacific at OANDA. If hopes for a truce fade, gold will rise, he added.
Investors are looking ahead to a weaker-than-expected U.S. jobs report that adds to evidence that the economy is gradually slowing, easing concerns that markets are heading toward a painful path of higher inflation and slower growth.
Meanwhile, Chicago Fed President Austan Goolsbee said Friday that recent economic reports like the April report give him comfort that the economy is not overheating, which could strengthen the case for monetary easing this year. High interest rates are typically negative for bullion because they don’t pay any interest.
Meanwhile, IG Market Performance Strategist Yep Jun Rong said the weak US data provides more policy flexibility for the Federal Reserve to cut interest rates, paving the way for gold prices to stabilize.
The US Bureau of Labor Statistics data showed that the economy added 175,000 jobs in April, compared with adding 315,000 in March's reading, which was revised upward by 12,000. This is the lowest rate of increase in employment in 6 months, and less than expectations of adding 240,000 jobs.
Cautious optimism over the economic outlook has curbed demand for safe-haven assets, weighing on gold, which typically benefits from safe-haven flows. Bullion has also become less attractive in recent weeks as signs mount that the Middle East is moving away from a potential all-out war.
Gold has gained about 12% this year despite a high inflationary environment and uncertainty about when the U.S. Federal Reserve will cut interest rates. The metal hit a record high in April, with gains linked to aggressive central bank buying, demand from Asian markets and safe-haven buying amid conflicts in Ukraine and the Middle East.
Gold at settlement on Friday
Gold futures erased gains on Friday, despite a decline in the dollar and U.S. bond yields following the release of economic data on the U.S. labor market.
At settlement, June gold futures settled at $2,308.6 per ounce, after touching $2,330.70, but recorded losses since the beginning of the week by 1.65%, after declining by 2.75% the week before last.
Gold and dollar now
Gold futures are now up 0.6% at $2,322 an ounce.
While spot gold contracts rose by about 0.52% to $2,314 per ounce.
On the other hand, the dollar index rose by 0.1% to 105.015 points.
Other minerals
Spot silver rose 1.3 percent to $26.89 an ounce. Platinum lost about 0.7 percent to $948.97, and palladium rose 0.1 percent to $946.58.
