Gold rises on weaker dollar; investors await US jobs data

Gold edged higher on Monday, supported by a weaker US dollar, while investors hunkered down for US economic data due later this week for signals on the Federal Reserve’s policy path.

Spot gold rose 0.6% to USD 3,293.55 per ounce as of 2:00 p.m. EDT (1800 GMT) after reaching its lowest point since May 29 earlier in the session. The yellow metal was up for the second straight quarter, rising 5.5%.

US gold futures settled 0.6% higher at USD 3,307.70.

“A weaker dollar today is providing a bit of support. But we’re still within the well-defined range that has dominated since the middle of May,” said Peter Grant, vice president and senior metals strategist at Zaner Metals.

The dollar languished against the euro and Swiss franc as markets weighed the prospect of a ballooning US government deficit and the potential for trade deals with major trading partners.

On the trade front, the US and China resolved issues over rare earth minerals and magnet shipments last week, renewing hopes for further talks between the two superpowers. Elsewhere, Canada scrapped its digital services tax targeting US tech firms late Sunday to revive stalled trade negotiations with the US

Gold, traditionally considered a hedge during times of uncertainty, also thrives in a low-interest rate environment.

Investors now await the US ADP employment data, due Wednesday, and Thursday’s initial jobless claims data for hints on the central bank’s potential policy path.

Citi analysts said in a note that they expect gold prices to consolidate between USD 3,100 and USD 3,500 in the third quarter of the year, noting that the late April peak of USD 3,500 may already be the high as the gold market deficit approaches its peak.

Spot silver eased 0.1% at USD 35.93 per ounce, while platinum fell 0.3% to USD 1,334.70, and palladium dropped 3.2% to USD 1,097.24. The three metals were headed for gains so far this quarter.

(Reporting by Sarah Qureshi in Bengaluru; Editing by Tasim Zahid, Shailesh Kuber, and Alan Barona)