Gold prices hit an eight-month high on Monday, helped by a drop in the US dollar after economic data late last week raised hopes for slower rate hikes from the Federal Reserve going forward.
Spot gold inched 0.3% higher to $1,870.43 per ounce by 12:20 p.m. ET, after reaching an intraday high of $1,880.90 earlier in the session. US gold futures were up by 0.4% to $1,877.50 per ounce.
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Meanwhile, the US dollar slipped 0.8% to its lowest in seven months, making gold cheaper for overseas buyers. Benchmark US 10-year Treasury yields were also hovering near a three-week low.
“Interest rates are looking like they’re going to continue higher. But they do have a limit of what they can do and the market is pricing that in,” said Bob Haberkorn, senior market strategist at RJO Futures, in a Reuters note.
“We are also seeing some flight to safety. Technically, gold looks like it has more room to go because it’s been strong through all these resistance points that we continue to see,” he added.
Gold prices jumped nearly 2% on Friday after data showed a moderation in US wage growth and a contraction in activity in services industries in December.
Money market bets show 75% odds of a 25-basis point hike at the Fed’s February policy meeting, with the terminal rate expected just below 5% by June.
Traders now await Fed Chair Jerome Powell’s speech at a central bank conference in Stockholm on Tuesday and the closely watched US consumer price index data due later this week, which could offer more cues on the rate hike path.
(With files from Reuters)
Source: MINING.COM – Read More