Gold experienced gains as the U.S. dollar waivered ahead of the release of U.S. inflation data later this week. The data is expected to have a bearing on the Federal Reserve’s monetary policy going forward.
“Gold has once again bounced back after taking support near $1,700/oz, but may struggle with the Fed’s continuing emphasis on aggressive tightening,” Ravindra Rao, head of commodity research at Kotak Securities Ltd. observed. The price of spot gold rose by 0.6% to $1,726.27, while the Bloomberg Dollar Spot Index declined by 0.6%; marking its first weekly drop in a month.
Metal gained 0.6% and the greenback slipped for a second day while silver, platinum, and palladium all strengthened on Monday as well. Further growth for gold and other commodities is largely expected to ride on the dollar’s strength as well as incoming inflation data.
Economists expect the latest data to show a slowdown in inflation growth for a second consecutive month to 8.1%. This would greatly assist the U.S. central bank to slow down the hike of interest rates in response to inflationary pressures.
