Gold prices remained relatively stable on Monday as traders awaited additional U.S. economic data for the week, but weakened-than-expected U.S. economic data caused the price of gold to increase. Spot gold rose by 0.9% to $2,348.06 per ounce, following a 2% gain the previous month. U.S. gold futures also saw an increase of about 1% to $2,368.60 per ounce.
David Meger, the director of alternative investments and trading at High Ridge Futures, expressed a positive bias towards gold prices moving forward, citing expectations of impending interest rate cuts later in the year. This sentiment was influenced by data showing a slowdown in U.S. manufacturing activity in May and unexpected declines in U.S. construction spending in April.
The dollar weakened against other currencies to a three-week low, making gold more attractive to investors holding other currencies, while U.S Treasury yields fell to a two-week low following disappointing manufacturing data.
Recent data from Friday showing stabilizing U.S inflation further supported expectations of future interest rate cuts by the Federal Reserve.
Traders are currently predicting a 59% chance of a Fed rate cut in September