Gold prices saw a significant uptick by about 1% on Monday, bouncing back from a recent decline as the rally in the dollar showed signs of slowing down. Investors were on edge, waiting for insights from U.S. Federal Reserve officials to gain clarity on the future direction of interest rates.
By 4:50 ET (9:50 GMT), the price of gold surged by 1.2% to $2,593 per ounce, while U.S. gold also experienced a similar increase, climbing by 1% to $2,597.
This positive momentum came after a six-day losing streak for the yellow metal, which had faced a 6% decline since the U.S. election on November 5. Analysts at UBS highlighted this as the worst post-election week since 1980 when Ronald Reagan assumed office as President of the United States.
Despite the recent surge in the dollar by 1.6% last week, its stability allowed gold to become more affordable for investors holding other currencies, contributing to the rise in gold prices.
Looking ahead, various U.S. central bank officials are set to deliver speeches this week, with discussions revolving around the impact of strong U.S. economic and inflation reports on potential rate cuts by the Federal Reserve. Last week, the release of positive U.S. retail sales data surpassed expectations, reinforcing the strength of the economy and leading investors to adjust their rate cut predictions for December.
Stay tuned for more updates on the financial market as developments unfold.
Analysis:
The surge in gold prices following a period of decline indicates a shift in market sentiment, influenced by factors such as the performance of the dollar and upcoming Federal Reserve announcements. Investors should closely monitor these developments to make informed decisions about their portfolios and potential investment opportunities.