Gold prices rose on Monday as traders analyzed conflicting indicators for the US economy and awaited speeches from Federal Reserve officials to gain insight into the future of interest rates. Despite a weaker-than-expected US jobs report suggesting that the economy is slowing down gradually, inflation remains persistent, limiting the actions the US central bank can take and potentially keeping bond yields stable. This has led some swap traders to cautiously increase their bets on policy easing this year, while gold investors are raising their bids in anticipation of prolonged inflation.
Gold prices have increased by over 12% this year despite prevailing inflation and uncertainty surrounding potential rate reductions by the Federal Reserve. A significant rally earlier in the year led to the metal reaching multiple record highs in April, driven by central bank purchases, Asian market demand, and safe-haven buying during geopolitical tensions. Recent developments in the Middle East signaling reduced likelihood of full-scale conflict have made gold less appealing to investors. However, there are still tensions in the region, with Israel’s military instructing civilians to evacuate parts of Rafah, potentially indicating an imminent attack on the city in Gaza. Cease-fire negotiations between Hamas and Israel have stalled, with the main point of contention being the duration of any truce as demanded by the Iran-backed militant group. At 10:26 a.m. in New York, spot gold was up by 1% to $2,324.97 per ounce, while silver also experienced gains during trading session.[
