Gold Prices Higher On Subdued Dollar And Yields, Less Hawkish Monetary Policy Expectations
Market comment on behalf of Konstantinos Chrysikos Head of Customer Relationship Management at Kudo.com
Gold prices climbed to their highest level in several weeks, supported by a more subdued US dollar and global bond yields. The move followed growing hopes for diplomatic progress in the Middle East, which could weigh on oil prices and ease concerns over global inflation.
Upcoming geopolitical developments could prove decisive in shaping the direction of both yields and gold. Progress towards a peace resolution could drive down yields and benefit the precious metal, while any setback is likely to increase demand for the dollar and weigh on the metal.
On the monetary policy front, markets continue to price in an interest rate increase at the Federal Reserve’s next meeting, though the odds of a hold have been rising, a shift that could lend some support to bullion.
Attention this week turns to Friday’s NFP data. Softer readings could reinforce expectations for a less hawkish stance, dragging yields lower and benefiting gold, while resilient figures would strengthen the case for tightening and limit gold’s upside.
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