In a significant surge, spot gold witnessed a 0.9% increase, reaching $1,936.84 per ounce, as of 1:55 p.m. EDT (1754 GMT). Simultaneously, U.S. gold futures posted a 0.9% gain, settling at $1,965.10.
The U.S. dollar faced a decline against its peers, reversing its earlier gains, following the release of data indicating a drop in U.S. job openings for July. Additionally, benchmark 10-year Treasury yields registered a slight decrease.
Jim Wyckoff, Senior Market Analyst at Kitco, attributed this upward momentum in gold prices to the combination of the downbeat Job Openings and Labor Turnover Survey (JOLTS) report along with the consumer confidence data. These figures suggest that the Federal Reserve might not raise interest rates to the extent previously anticipated, contributing to a positive environment for gold. The market also observed some short-covering.
Investor attention is now centered on the upcoming U.S. personal consumption expenditures price index scheduled for Thursday and the nonfarm payrolls report on Friday. These releases are expected to offer further insights into the trajectory of interest rates.
The CME FedWatch tool reflects the evolving sentiment, with traders now indicating an 86% probability of the Federal Reserve maintaining unchanged rates at its September meeting. This figure has risen from 78% prior to the release of the data.
The backdrop for this shift is the recognized fact that higher interest rates elevate the opportunity cost of holding non-yielding assets like bullion.
In line with this sentiment, SPDR Gold Trust, the largest gold-backed exchange-traded fund globally, reported a 0.3% increase in its holdings on Monday.
Carsten Fritsch, Analyst at Commerzbank, noted that the recovery in gold prices since the previous week suggests a subsiding of the selling pressure exerted by speculative financial investors.
Among other precious metals, silver experienced a notable 1.9% ascent, reaching $24.71 per ounce. Platinum demonstrated robust gains of 1.5%, surging to $978.45, marking its highest point in a month. Conversely, palladium saw a marginal dip of 0.6%, reaching $1,247.35.
