Spot gold prices rose to above $5,000 an ounce on Monday, supported by a weaker dollar, as a series of U.S. economic reports due this week put investors’ attention back on interest rates.
Spot gold rose 1.1% to $5,012.53 an ounce by 0948 GMT, after rising 4% on Friday. U.S. gold futures for April delivery rose 1.1% to $5,033.70 an ounce.
“Gold is regaining its historic role as a neutral sovereign asset, and I think this explains the strong demand for gold, especially as the appetite for holding the US dollar as a safe-haven asset has clearly waned,” said Rania Gul, senior market analyst at XS.com. The US dollar fell 0.3%, making US dollar-priced bullion cheaper for overseas buyers.
Investors are now looking to this week’s January nonfarm payrolls report, consumer price index data, and new jobless claims data for further clues about monetary policy, which is priced in at least two 25 basis point rate cuts in 2026.
Lower interest rates tend to support gold as it reduces the opportunity cost of holding non-yielding assets. San Francisco Federal Reserve President Mary Daly said Friday that the U.S. labor market is in “unstable” conditions and further rate cuts may be necessary. Meanwhile, the People’s Bank of China extended its gold buying spree for 15 months in January, according to data released by the bank on Saturday.
This “reflects a clear strategy aimed at diversifying foreign exchange reserves away from the US dollar and thereby reducing exposure to geopolitical and financial risks,” Gul added. Spot silver rose 4.3% to $81.32 an ounce, after rising nearly 10% in the previous session. It hit an all-time high of $121.64 on January 29th.
“Silver is a riskier asset than gold. When risk appetite is strong, silver tends to outperform gold,” said Fawad Razakzada, market analyst at City Index and FOREX.com.
Spot platinum fell 1.5% to $2,065.10 an ounce, and palladium fell 1.1% to $1,687.50.
(Reporting by Pablo Sinha in Bangalore; Editing by Leroy Leo)
