Gold edges higher on softer dollar as rate-hike expectations ease
BENGALURU: Gold prices inched higher in early Asian trade on Monday, supported by a softer dollar and recent economic data that curbed expectations of a US interest rate hike next month.
Gold prices edged higher in early Asian trade on Monday, buoyed by a weaker dollar and recent economic data that dampened expectations of a US interest rate increase next month. Spot gold rose 0.3 percent to US$4,388.62 per ounce, while US gold futures for December delivery climbed 0.2 percent to US$4,444.30. The US dollar index fell 0.1 percent, making foreign currency holdings of greenback-priced metals more attractive.
An unexpected drop in US nonfarm payrolls in July, combined with mild inflation data released last week, has reduced the probability of a Federal Reserve rate hike next month from 47 percent to 33 percent, according to the CME's FedWatch Tool. Gold is typically favored in a low-interest-rate environment. The Fed's July meeting minutes, released on Wednesday, will provide further insights into the central bank's policy outlook.
Meanwhile, US President Donald Trump's envoys met with Egyptian, Qatari, and Turkish mediators in Cairo on Sunday to advance his Gaza peace plan, despite Israel's ongoing airstrikes in the enclave. In India, gold discounts widened to their highest levels in over two months as higher bullion prices curbed consumption. Gold prices for silver, platinum, and palladium also rose slightly, with silver up 0.8 percent to US$65.19 per ounce, platinum increasing 0.4 percent to US$1,755.40, and palladium gaining 1.2 percent to US$1,329.00.
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