Spot Gold held near a 7 1/2-week high of $4,353.55/oz. on Monday, as the US Dollar stood near a two-month low, while investors braced for the US Non-Farm Payrolls data tomorrow for more insight into macroeconomic conditions and the Fed’s future interest rate path.
“Gold is likely to remain well bid into U.S. non-farm payrolls, as evidence of labor market slack would keep front-end yields capped and the dollar weak, supporting a push toward $4,380–$4,440 after a firm rebound from the $4,243 support zone,” OANDA senior market analyst Kelvin Wong was quoted as saying by Reuters.
The Federal Reserve delivered a largely anticipated rate cut last week, while noting it will wait for clearer signs on a cooling job market and inflation, which “remains somewhat elevated”.
But, the vote was divided, as three FOMC members continued to vote against the rate reduction.
FOMC policy makers signaled just one 25 bps rate cut for next year, or the same projection as in September.
The Federal Reserve also said it would purchase about $40 billion in short-term Treasury bills in order to ease money market strains. This decision may provide additional support to precious metals.
Spot Gold was last up 0.94% on the day to trade at $4,339.96 per troy ounce.
Strong central bank buying, US tariff policies, potential rate cuts by the Federal Reserve, robust ETF inflows and geopolitical uncertainty have fueled Gold’s rally to a series of record highs this year. Its current all-time high stands at $4,381.21/oz.
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