Gold hits near one-month high on dollar weakness

Aug 1 (Reuters) – Gold neared a one-month high on Monday on the back of a decline in the US dollar, with investors awaiting economic data that could influence the path of Federal Reserve policy tightening.

Spot gold was up 0.2% at USD 1,768.44 per ounce by 2:31 p.m. EDT (1831 GMT), having earlier hit its highest since July 5 at USD 1,774.95.

US gold futures settled 0.3% higher at USD 1,787.70.

Gold has more room to the upside given “major issues with Russia, Ukraine and China” and as the dollar runs into some resistance, said Daniel Pavilonis, senior market strategist at RJO Futures.

He added that interest rates are still the biggest factor for gold and even if the Fed is not done raising rates, it is taking a pause. “That is a buying signal,” Pavilonis said.

The Fed raised interest rates by an expected 75-basis-points on Wednesday, but comments from Chair Jerome Powell spurred hopes of a slower hiking path, hitting the dollar.

A weaker dollar makes gold less expensive for buyers holding other currencies.

“Bullion bulls are waiting to see if the coast is clear for another leg up, making sure expectations for a less-aggressive Fed are indeed rooted in reality,” said Han Tan, chief market analyst at Exinity.

Safe-haven gold has also found some support from weak economic data recently, including an unexpected contraction in the US economy over the second quarter and slower euro zone manufacturing activity.

The monthly US jobs report on Friday will be closely scanned as it could influence the Fed’s rate hike plans.

Elsewhere, spot silver fell 0.4% to USD 20.24.

Platinum gained 0.7% to USD 903.49 and palladium jumped more than 3% to USD 2,196.65.

(Reporting by Arundhati Sarkar in Bengaluru; editing by Jason Neely, Aditya Soni, and Nick Zieminski)