Gold prices climbed on Monday after enduring losses for six consecutive sessions. The rebound was attributed to a pause in the U.S. dollar’s recent rally, with spot gold increasing by 1.2% to $2,591.43 per ounce as of 1027 GMT. U.S. gold futures also rose, gaining 1% to reach $2,595.80. This recovery comes after gold experienced its steepest weekly decline in over three years due to shifting expectations regarding U.S. Federal Reserve interest rate cuts, which had bolstered the dollar last week.
While the dollar remains steady just below its recent one-year high, a softer greenback has made gold more affordable for buyers using other currencies. Independent analyst Ross Norman highlighted the impact of the dollar on gold’s recent price fluctuations, noting that while a solid price floor has yet to emerge, opportunistic buying is beginning to lend support to the market. Norman also pointed out that year-end volatility, coupled with profit-taking and financial adjustments, could further influence gold prices regardless of the Federal Reserve’s December decisions.
Recent economic data in the U.S. has dampened hopes for a December rate cut, with higher interest rates generally making non-yielding assets like gold less attractive. Several Federal Reserve officials are scheduled to provide updates this week, which could shape market sentiment on the future trajectory of interest rates.
Michael Langford, chief investment officer at Scorpion Minerals, commented on the broader implications of U.S. policy, suggesting that while a stronger dollar under President Trump’s administration might weigh on gold prices in the short term, the inflationary effects of his policies could boost gold in the long run.
In the broader precious metals market, spot silver rose 1.7% to $30.73 per ounce, platinum advanced by 1.8% to $955.31, and palladium climbed 1.9% to $968.63.
Gold’s recovery highlights the interplay between currency movements and investor sentiment, with market participants eyeing Federal Reserve commentary for further clues on interest rate policy. The broader precious metals market also saw gains, reflecting renewed interest across the sector.
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