Spot gold rose by 0.2% to $2,181.47 per ounce, following Friday’s record high of $2,194.99, which was driven by positive U.S. labour market data that heightened expectations of a rate cut
Gold witnessed a slight increase on Monday, trading close to its all-time high after a remarkable surge last week. This rise comes as traders brace for the release of U.S. inflation data, which could offer more insight into the Federal Reserve’s interest rate trajectory.
At 1937 GMT, spot gold rose by 0.2% to $2,181.47 per ounce, following Friday’s record high of $2,194.99, which was driven by positive U.S. labour market data that heightened expectations of a rate cut.
Meanwhile, U.S. gold futures concluded the day 0.1% higher at $2,188.6.
The U.S. consumer price inflation (CPI) data for February is scheduled to be released on Tuesday.
If the data “comes in hot, above last month’s report, then that’s going to probably be a little troublesome to the gold market (and) might cause some near-term selling pressure”, said Jim Wyckoff, senior analyst at Kitco Metals, adding it is very likely gold will see new highs in the near term.
According to the CME FedWatch tool, traders are currently factoring in a roughly 70% probability of an interest rate cut by June.
Furthermore, gold has received support from central bank buying.
In a display of bullish sentiment, COMEX gold speculators increased their net long positions by 63,018 contracts to 131,060 in the week ending March 5, as indicated by data released on Friday.
In other precious metals, spot silver climbed 0.6% to $24.45, while platinum saw a gain of 2.5% to $935.02 per ounce, and palladium added 0.8% to $1,027.55.
With large speculators having increased net-long exposure at their fastest weekly pace in 3.5 years last Tuesday, gold is clearly in demand and not a market to short for any length of time whilst traders expect Fed cuts, according to City Index senior analyst Matt Simpson.
