On Monday session, gold prices traded quietly in the commodities market with Gold on COMEX down by 0.28% to 1,247.70 per troy ounce, while gold spot was 0.21% lower from the previous session at 1,246.60/t oz.
The movement of the yellow metal on Monday session was driven by a slightly stronger and rallying US dollar, after the greenback got a boost from the release of various economic data, as well as a more dovish Federal Reserve over another possible rate hike.
DXY, the US dollar index was trading strong against the basket of major currencies and was up by 0.25% on early Monday, recovering from its four-month lows last week. However, a statement made by a Federal Reserve official made last Friday regarding a possible holding of interest rate hikes could actually benefit the precious metal, should this go through.
“Gold is stuck between $1,238 - $1,260 with the risk to skewed to downside based on rising expected interest rates and failure to break higher which has left it vulnerable to profit-taking in the short term,” stated a commodity strategist from Saxo Bank.
Despite the current muted trading rate the gold is experiencing, the commodity still rallied earlier today due to the tepid US economic data released.
US consumer spending saw slow growth for February due to delays in the payment of income tax refunds. In addition to that, the most recent annual jump in US’s inflation further fueled speculation over more possible rate hikes this year.
Meanwhile, markets are currently focused on upcoming release of US payroll figures, as well as US President Donald Trump’s meeting with China’s President Xi Jinping on Thursday and Friday. Last Sunday, Trump previously hinted on using trade as a lever in order to close a sure Chinese cooperation and partnership against North Korea.
Analysts believe that Trump becomes successful on this agenda, that gold could get a boost in the market.
Money managers and hedge funds still remained bullish over the yellow metal and place net long position in COMEX gold. Meanwhile for other commodities in the market, Silver traded 0.53% lower to 18.16 per troy ounce, while copper was down 0.06% to 265.10/lb, and platinum spot declined 0.21% to 948.31 per troy ounce.
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