Investing.com — In Asian trading on Monday, weaker-than-expected U.S. jobs data led traders to increase bets on an eventual interest rate cut by the Federal Reserve, taking advantage of recent dollar weakness. Gold prices rose in Asian trading on Monday.
However, gold’s gains were capped as Friday’s economic data prompted investors to move money into riskier assets such as stocks.
By 12:31 ET (04:31 GMT), it was up 0.4% at $2,310.05 an ounce, and by June deadline it was up 0.4% at $2,318.70 an ounce.
Gold regains momentum as interest rate cut expectations rekindle
Gold also rose after the yellow metal plummeted from all-time highs over the past three weeks. Concerns about longer-term interest rates and weaker safe-haven demand have been the biggest weight on gold in recent trading.
However, the yellow metal has eased somewhat from last week’s decline of 0.8%. The dollar’s decline was mainly driven by Friday’s jobs report, which increased expectations that the Federal Reserve will start cutting interest rates by September.
The cooling labor market has given the Fed some impetus to cut rates, but the main issue remains persistent inflation. Inflation in the first quarter appeared to be further above the Fed’s 2% annual target, prompting traders to price in most of their expectations for rate cuts this year.
High interest rates bode poorly for gold, given that they increase the opportunity cost of investing in the yellow metal.
This week’s focus is on a series of speeches from top Fed officials looking for more clues on interest rates.
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Other precious metals were also a little mixed on Monday. It fell 0.3% to $962.60 an ounce, while it rose 1.7% to $27.130 an ounce.
Copper prices rise on weak dollar, aiming for two-year high
Among industrial metals, copper prices rose on Monday, pushing back toward a two-year high as metal prices benefited from a weaker dollar.
On the London Metal Exchange, it rose 1.7% to $9,930.0 a tonne and rose 0.5% to $4.5888 a pound.
Both contracts were still in anticipation of the first peak in two years, with expectations for a tightening of the market due to metal sanctions against Russia and expectations for an improvement in demand in China, the largest importing country.
