Gold rises on softer dollar, US Fed meeting in focus

Gold prices rose on Monday, helped by a weaker dollar, as focus turns to the Federal Reserve’s policy meeting and US non-farm payrolls data due this week for cues on the central bank’s interest-rate trajectory.

Spot gold was up 0.2% to USD 2,342.41 per ounce by 2:05 p.m. ET (1805 GMT). US gold futures settled 0.4% higher at USD 2,357.7.

The dollar slipped 0.3% against its rivals, making gold more attractive to holders of other currencies.

“Gold market participants are essentially waiting for this Friday’s non-farm payrolls report. Markets are well priced for the notion that the Fed should be in no rush to cut rates, given signs of sticky inflation and resilient growth,” Daniel Ghali, commodity strategist at TD Securities, said.

A hotter-than-expected consumer price inflation report for March, released earlier this month, prompted traders to dial back expectations for interest-rate cuts by the Federal Reserve.

The Fed’s two-day policy meeting starts on April 30. The US central bank is expected to hold its benchmark interest rate steady at 5.25% to 5.5% at the end of the meeting on Wednesday, according to the CME FedWatch tool.

Higher rates reduce the appeal of holding non-yielding gold.

The US non-farm payrolls data will also be closely watched for clarity on the Fed’s rate-cut projections.

Gold fell by 2.2% last week, amid cooling Middle East tensions and fading expectations for early US rate cuts this year.

Meanwhile, analysts raised their 2024 gold price forecasts, expecting simmering geopolitical tensions to coax investors to seek refuge in the safe-haven asset and further spur record-beating prices, a Reuters poll showed.

Spot silver rose 0.5%, to USD 27.30 per ounce. The metal fell by 5.2% last week before finding buy-side support below the USD 27 mark, said Frank Watson, market analyst, Kinesis Money.

Spot platinum gained 3.9%, to USD 949.71 per ounce, while palladium rose 2.5%, to USD 977.75.

(Reporting by Brijesh Patel and Daksh Grover in Bengaluru; Additional reporting by Polina Devitt; Editing by Shounak Dasgupta and Pooja Desai)