The US economy is gradually slowing down, alleviating concerns about a combination of high inflation and sluggish growth. Despite this, inflation remains persistent, limiting the actions the US central bank can take and keeping bond yields in their recent ranges. Gold has risen by more than 12% this year amidst a backdrop of inflation and uncertainty surrounding potential rate cuts by the US central bank. The metal experienced a record-breaking rally in April, reaching consecutive all-time highs driven by strong central bank purchases, demand from Asian markets, and safe-haven buying amid conflicts in Ukraine and the Middle East.
Last week’s weaker-than-expected US jobs report contributed to the perception that the economy is gradually slowing down. This news caused gold prices to rise on Monday as traders evaluated conflicting signals on the US economy and awaited comments from several Federal Reserve speakers to gain insight into the future of interest rates. Trading volumes were lower than usual due to holidays in the UK and Japan.
Some swap traders are cautiously increasing their bets on policy easing this year, while gold investors are boosting their bids in anticipation of sustained high inflation. Gold prices rose up to 1.3% on Monday as trading volumes were lower than usual due to holidays in the UK and Japan. Despite easing tensions between Israel and Palestine, ongoing concerns remain regarding Israeli military evacuation warnings in parts of Rafah.
Gold prices are currently at $2,324.97 an ounce, with other precious metals like silver, palladium, and platinum also seeing gains. The Bloomberg Dollar Spot Index has slightly decreased. The market continues to monitor economic indicators and geopolitical developments for potential shifts in gold prices as it rises above its first consecutive weekly declines since February.
