Gold prices rose on Monday as traders analyzed conflicting indicators for the US economy and awaited speeches from Federal Reserve officials to gain insight into the future of interest rates. The precious metal experienced a gain of up to 1.3% following two consecutive weeks of losses since February. Despite concerns about high inflation and sluggish growth, gold investors are raising their bids in anticipation of prolonged inflation, while some swap traders are cautiously increasing their bets on policy easing this year.
In recent developments, gold has increased by over 12% this year despite the prevailing inflation and uncertainty surrounding potential rate reductions by the Federal Reserve. A significant rally earlier in the year led to the metal reaching multiple record highs in April, driven by central bank purchases, Asian market demand, and safe-haven buying during geopolitical tensions. However, recent developments in the Middle East have made gold less appealing to investors due to tensions between Israel and Hamas that could lead to full-scale conflict.
Despite these concerns, there are still tensions in the region with Israel’s military instructing civilians to evacuate parts of Rafah potentially indicating an imminent attack on Gaza City. Cease-fire negotiations between Hamas and Israel have stalled with the main point of contention being the duration of any truce demanded by Iran-backed militant group Hamas. At 10:26 a.m., spot gold was up by 1% to $2,324.97 per ounce while Bloomberg Dollar Spot Index fell. Silver, palladium, and platinum also experienced gains during trading session
