Gold Prices Rise Amid Fed Speculations
Solid ECN – Gold prices climbed to $2,310 per ounce on Monday, rebounding from a near one-month low. This surge is influenced by anticipation of upcoming remarks from Federal Reserve officials, which traders are eyeing for hints about potential interest rate cuts.
This keen interest stems from recent U.S. labor data that indicated a slowdown in job growth last April, suggesting that the Fed might start reducing rates later in the year.
Interest Rate Expectations and Gold's Appeal
The possibility of reduced interest rates, which decrease the opportunity cost of holding gold, has bolstered the metal's attractiveness. According to the CME's FedWatch Tool, there's a 67% likelihood of a rate cut by September.
Furthermore, geopolitical tensions, such as the fading hopes for a Gaza ceasefire reported on Sunday, have heightened gold's status as a safe-haven asset.
Global Gold Demand Fluctuates
Despite the price drop, gold demand in India remained subdued last week, with buyers waiting for further price declines. In China, gold premiums decreased for the second consecutive week, reflecting reduced demand during the holiday period.