Gold held a four-day rally, with traders seeking refuge in the haven asset as risk-off sentiment swept markets on fresh uncertainty over the Federal Reserve’s rate path.
Bullion traded near the highest in almost a month after notching a 1.9% gain last week despite headwinds from rising bond yields and a stronger dollar. A report on Friday showed exceptional resilience in the US labor market, causing economists at some big banks to revise down forecasts for additional rate cuts.
Investors are bracing for more volatility ahead of Donald Trump’s return to the White House. A raft of stronger-than-expected data last week saw traders scale back equity risk in favor of haven assets such as the dollar and gold, Pepperstone Group Ltd. Head of Research Chris Weston said in a note.
Spot gold dipped 0.2% to $2,685.85 as of 8:29 a.m. in London.
Gold’s resilience can be attributed to uncertainty about inflation and Trump’s policy changes, Priyanka Sachdeva, an analyst at Phillip Nova Pte. Ltd. said in a note. A sustained consolidation above the $2,700 mark would allow gold bulls to aim for a target of $3,000 per ounce, she said.
Traders are now shifting focus to US inflation figures due later this week, with the consumer price index report scheduled for release on Wednesday. They’ll also be watching the New York Fed’s one-year inflation expectations due Monday, producer prices on Tuesday and jobless claims on Thursday.
