New York: Gold prices surged by more than 1% on Monday, recovering from last week’s sharp declines, as the recent rally in the dollar stalled. Investors were waiting for comments from Federal Reserve officials this week to gain further insights into the U.S. interest rate outlook.
Spot gold climbed 1.2% to $2,591.16 per ounce by 0444 GMT, after suffering its worst weekly performance in over three years on Friday. U.S. gold futures also saw a 1% rise, reaching $2,595.70.
The dollar was flat after a 1.6% increase last week. A weaker dollar makes gold more affordable for holders of other currencies, which helped boost demand for the precious metal.
“Gold prices are due for a slight recovery following recent hefty sell-offs, and we may expect some drift higher with a slowdown in the dollar’s rally,” said IG market strategist Yeap Jun Rong. “We can expect less-dovish rhetoric from U.S. policymakers in December, as the Fed sets the stage for a potential rate hold in January. This has not been fully priced in by markets yet, so any need for recalibration may still pose an obstacle for gold.”
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This week, at least seven U.S. central bank officials are scheduled to speak. Strong U.S. economic and inflation data continue to shape the debate among Fed policymakers on the pace and extent of rate cuts. Investors last week downgraded their expectations for a rate reduction in December.
Economic data from Friday showed U.S. retail sales slightly exceeded expectations for October, reinforcing the resilience of the economy.
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Higher interest rates tend to reduce the appeal of holding non-yielding assets like gold.
In addition to gold’s rally, other precious metals also saw gains. Spot silver rose 1.5% to $30.67 per ounce, platinum was up 1.6% at $953.90, and palladium climbed 2.1% to $970.36.
