Gold Edges Higher as Fed Hike Bets Fade
Gold prices edged higher on Monday after hitting a seven-week high in the previous session. The increase came as weak US jobs data tempered expectations for Federal Reserve rate hikes.
The spot price of gold was up 0.1% at $4,345.09 per ounce, while US gold futures rose 0.1% to $4,404.80. ActivTrades senior analyst Ricardo Evangelista attributed the gains to the 'positive momentum' following last week's disappointing US jobs report.
Data showed the US economy unexpectedly shed jobs in July, with previously reported job gains for the prior two months revised sharply lower. This weakened expectations for a Federal Reserve rate hike next month, with traders now pricing a 44% chance of a rate hike in September compared to 57% before the jobs report.
Economists polled by Reuters expect the July consumer price index to have risen 3.4% year-on-year, compared to 3.5% in June. A headline figure below this forecast could further reduce expectations of a Fed rate increase before the end of the year, weakening the dollar and creating upside potential for gold.