Gold prices were flat on Monday as a stronger-than-expected US jobs report reinforced the Federal Reserve’s cautious stance on rate cuts, while uncertainty surrounding the incoming Trump administration’s policies continued to fuel safe-haven demand.
Spot gold held ground at $2,689.09 per ounce as of 0212 GMT, hovering near the one-month high hit on Friday. US gold futures gained 0.2% to $2,719.50.
“The yellow metal has shown resilience and the strength may potentially reflect its renewed appeal as a hedge against inflation risks, particularly as questions are now arising over the Fed’s credibility, with markets looking for a less dovish outlook than what US policymakers guided for in December,” IG market strategist Yeap Jun Rong said.
The upbeat jobs report on Friday supported the Fed’s cautious stance toward further policy easing this year amid mounting fears that pledges by US President-elect Donald Trump to impose or massively raise tariffs on imports could stoke inflation.
Traders have now fully priced in that the Fed will hold rates at its meeting later this month and expect only one rate cut this year, which will be in June.
Bullion is used as a hedge against inflation, although higher interest rates reduce the non-yielding asset’s appeal.
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Investors will closely watch the monthly US consumer price index date due later in the week. Several Fed officials are also scheduled to speak this week.
“Weaker US data ahead will be the much-needed catalyst here in taking some heat off the ‘economic resilience’ story and call for a meaningful reversal in yields. However, this week’s data calendar still suggests a cautious outlook for now,” Yeap said.
Spot silver fell 0.1% at $30.36 per ounce, platinum dropped 0.3% to $962.18, while palladium gained 0.3% to $950.90.
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