Investing.com — Gold prices rose in Asian trading Monday, benefiting from a recent decline in the dollar, after softer-than-expected U.S. payrolls data saw traders increase their bets on possible interest rate cuts by the Federal Reserve.
But gold’s gains were held back by improved risk appetite in the wake of Friday’s data, as investors turned to more risk-exposed assets such as stocks.
rose 0.4% to $2,310.05 per ounce, while the June term rose 0.4% to $2,318.70 per ounce at 00:31 ET (04:31 GMT).
Gold is regaining some ground as interest rate cuts reemerge
The gains in gold also came after the yellow metal fell sharply from record highs of the past three weeks. Fears of high interest rates and declining demand for safe havens have been the biggest pressures on gold in recent sessions.
But the yellow metal took some relief from a decline in the , which lost 0.8% last week. The dollar’s losses were mainly driven by Friday’s payroll data, which raised expectations that the Fed would cut rates in September.
While a cooling labor market gives the Fed some impetus to cut rates, the main point of contention remains the issue of persistent inflation. Inflation continued to rise above the Fed’s 2% annual target in the first quarter, prompting investors to price in most expectations for rate cuts this year.
High interest rates do not bode well for gold as they increase the opportunity cost of investing in the yellow metal.
The focus this week is on a series of speeches from top Fed officials for more clues about interest rates.
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Other precious metals were somewhat mixed on Monday. fell 0.3% to $962.60 per ounce, while the price rose 1.7% to $27.130 per ounce.
Copper prices are rising on a weaker dollar, in sight of a two-year high
Among industrial metals, copper prices rose on Monday, returning to a two-year high as metal prices benefited from a weaker dollar.
on the London Metal Exchange rose 1.7% to $9,930.0 per tonne, while it rose 0.5% to $4.5888 per pound.
Both contracts remained within sight of two-year peaks amid expectations of tighter markets on metal sanctions against Russia, as well as hopes for an improvement in demand in top importer China.