Spot gold rose 0.1 percent to $2,166.39 an ounce Gold prices rose slightly on Monday; Supported by renewed expectations that the US Federal Reserve will begin cutting interest rates next June, in addition to the weakness of the dollar, which has increased the attractiveness of the precious metal. The spot gold price rose by 0.1 percent, reaching $2,166.39 per ounce, by 06:48 (GMT), and US gold futures rose by 0.4 percent to $2,167.70 per ounce, according to Reuters.
The dollar fell 0.1 percent against other currencies, making gold less expensive for holders of other currencies. “The environment still looks quite healthy for precious metals markets,” said Tim Waterer, chief market analyst at KCM Trade. He added: “Markets are still looking forward to imminent interest rate cuts by the US Federal Reserve. “June seems to be the most likely time when they expect to make the first rate cut.”
Gold prices rose to their highest level ever, last Thursday, after Federal Reserve policymakers indicated that they still expect to cut interest rates by three-quarters of a percentage point, by the end of 2024, despite the recent high inflation readings. Low interest rates reduce the opportunity cost of holding bullion. Traders are now pricing in a 74 percent probability that the Federal Reserve will begin cutting interest rates in June, according to the CME Group’s Fed Watch tool.
Investors are now waiting for the US Core Personal Consumption Expenditures (BCE) price index data, scheduled to be released on Friday, to see whether this can change the Fed’s expectations of cutting interest rates three times this year. The index is expected to rise by 0.3 percent last February, which will maintain the annual pace at 2.8 percent. A number of markets are closed on Friday due to Good Friday, when BCE data is due to be released, so the full reaction is expected next week.
According to Reuters technical analyst Wang Tao, spot gold may break the support level at $2,161 per ounce, and fall to a range between $2,147 and $2,152. In contrast, the spot silver price fell by 0.1 percent to $24.62 per ounce, platinum rose by 0.2 percent to $896.23, and palladium rose by 0.8 percent to $993.37.