Gold Snaps Losing Streak Awaits NFP on Friday

Gold climbed 1 percent on Monday as a dip in the dollar sparked a rally from the previous session’s six-week low, though caution over the timing of a U.S. interest rate hike kept prices hemmed within a narrow range.

Silver also jumped, to its highest level in nearly four weeks, as the dollar index gave up early gains to fall 0.1 percent. Trading across financial markets was thinned by a UK holiday on Monday, with London markets closed.

Spot gold was up 0.9 percent at $1,188.30 an ounce at 1346 GMT, off a high of $1,192, while U.S. gold futures for June delivery were up $13.10 an ounce at $1,187.60.

On Friday, spot prices fell to their lowest since March 20 at $1,170.20 an ounce after the Federal Reserve indicated that it saw a recent slowdown in the U.S. economy as transitory and did not rule out an interest rate rise this year.

A rate rise – the first in nearly a decade – would lift the opportunity cost of holding gold, while boosting the dollar, in which it is priced.

Investors will be monitoring U.S. economic data due this week, including the key non-farm payrolls report for April due on Friday, for their impact on the dollar and interest rate expectations.

via Reuters

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza