Gold Gleams as Dollar Dims and Rates Cool

22 Jul 2024 , 09:58 AM

Gold prices moved up on Monday, aided by a weaker dollar and anticipation of a US interest rate cut, as attention shifted to economic data for more clues into the Federal Reserve’s monetary policy direction.

Spot gold was up 0.3% at $2,408.19 per ounce. Prices reached an all-time high of $2,483.60 last week. Gold futures increased 0.5% to $2,410.40.

The dollar index declined 0.1%. A weakening dollar makes bullion more appealing to buyers using other currencies.

Investors are focusing on the US central bank’s Sept. 17-18 meeting for the start of rate decreases, which Fed Chair Jerome Powell has stated will be a “consequential” shift in policy from the pandemic-era war against inflation to a phase of easing monetary policy.

Lower interest rates diminish the potential cost of storing non-yielding bullion.

The market will be focused on Friday’s U.S. PCE price index data. Other data releases include existing home sales, July S&P Global flash PMIs, advance second-quarter GDP, and weekly jobless claims.

Asian physical gold demand remained sluggish last week, showing clients’ hesitation to make new purchases despite substantial discounts, with many instead taking advantage of record-high bullion prices.

On the political front, U.S. President Joe Biden abandoned his failing reelection quest on Sunday, citing mounting pressure from his Democratic colleagues, and endorsed Vice President Kamala Harris to replace him as the party’s nominee to face Republican Donald Trump in November.

Spot silver rose 0.3% to $29.34 per ounce, platinum jumped 0.9% to $970.65, while palladium climbed 1.6% to $920.83.

For feedback and suggestions, write to us at [e-mail]