Gold prices saw an increase on Monday despite the dollar index rising. Meanwhile, traders await comments from Federal Reserve officials for more insight into the U.S. interest rate cut timeline.
In Saudi Arabia, 24-carat gold saw a 0.43 percent increase to SAR279.05 per gram and SAR8,679.27 per ounce.
Globally, spot gold saw a 0.31 percent increase to $2,308.98 per ounce, as of 5:20 GMT. Meanwhile, U.S. gold futures saw a 0.50 percent increase to $2,320.25.
The dollar index rose 0.12 percent, which historically makes gold less attractive to buyers holding other currencies. However, despite the rising dollar and increased uncertainty regarding Fed interest rates, gold prices remained above the $2,300 mark.
U.S. jobs data
On Friday, data on U.S. job growth revealed a more-than-expected decline in April, which reinforced expectations that the Federal Reserve will start cutting interest rates later in the year. Currently, markets are pricing a 67 percent chance of a U.S. interest rate cut in September, according to CME’s FedWatch Tool. High interest rates increase the opportunity cost of holding bullion and make non-yielding assets like gold less attracting.
Austan Goolsbee, president of the Chicago Federal Reserve, advocated for a more comprehensive approach to the Fed’s quarterly “dot plot” on Friday, suggesting the inclusion of individual economic forecasts that underpin policymakers’ interest rate perspectives. Meanwhile, New York Fed Bank president John Williams emphasized the significance of maintaining the 2 percent inflation target as a cornerstone of the Fed’s price stability objectives.
Global demand dynamics
Despite a minor correction in prices, physical gold demand in India remained subdued as buyers adopted a wait-and-watch approach, anticipating further declines in prices. Similarly, Chinese premiums experienced a decline for the second consecutive week due to sluggish holiday demand.
Read: Saudi Arabia set to increase assets under management to 29.4 percent of GDP by 2024
Other precious metals
In addition to the increase in gold prices, spot silver rose by 1.18 percent to $26.85 per ounce. However, platinum experienced a 0.17 percent decline to $953.75, while palladium edged up by 0.23 percent to $947.97 per ounce.
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