NEW YORK: Gold prices rose for a third straight session on Monday after last week’s economic data fueled expectations of interest rate cuts by the US Federal Reserve.
Spot gold rose 0.3% to $3,373.22 per ounce as of 0915 a.m. ET (13:15 GMT), its highest level since July 24. US gold futures gained 0.8% to $3,427.10.
“The odds are stronger now for a rate cut in September and even stronger for another rate cut in December. That coupled with the headwinds of inflation, I think is pretty bullish for gold,” said Daniel Pavilonis, senior market strategist at RJO Futures.
Last week, data showed that US employment growth was weaker than expected in July while the nonfarm payrolls count for the prior two months was revised down by a massive 258,000 jobs, suggesting a sharp deterioration in labour market conditions. Additionally, the Fed’s preferred gauge, US PCE inflation data, increased 0.3% in June after an upwardly revised 0.2% gain in May as tariffs started raising the cost of some goods.
According to the CME FedWatch tool, traders now see an 85% chance of a September rate cut, up from just over 63% a week ago. Bullion typically performs well in a low-interest-rate environment and is regarded as a hedge against inflation.
The tariffs US President Donald Trump imposed last week on scores of countries are likely to stay in place rather than be cut as part of continuing negotiations, Trade Representative Jamieson Greer said in comments aired on Sunday. Trump set rates including a 35% duty on many goods from Canada, 50% for Brazil, 25% for India, 20% for Taiwan and 39% for Switzerland, according to a presidential executive order.
Comments
Comments are closed for this article.