Gold prices rise as investors await US inflation data

(MENAFN) Gold prices rose on Monday as investors awaited U.S. inflation data later this week, which could provide insights into the Federal Reserve's future monetary policy decisions. Spot gold increased by 0.1 percent, reaching USD2,631.60 an ounce by 00:09 GMT, after earlier peaking at USD2,647.99. U.S. gold futures settled at USD2,658.10 an ounce.

Traders are closely monitoring the U.S. inflation data, scheduled for release on Wednesday, as it could influence the Federal Reserve's actions. Current market expectations suggest an 85.1 percent chance of a 25 basis point rate cut this month, according to the CME Group's FedWatch tool. A lower interest rate typically reduces the opportunity cost of holding non-interest-bearing assets like gold.

The anticipation of a rate cut follows recent data showing that while the U.S. labor market remains strong, it has continued to slow down in November. This has led to speculation that the Federal Reserve may reduce interest rates to support the economy. In addition to economic factors, geopolitical tensions have also contributed to gold’s appeal, with market participants seeking safe-haven assets amid uncertainty.

On the geopolitical front, Syrian opposition fighters seized control of Damascus on Sunday in a swift offensive that forced President Bashar al-Assad to flee to Russia. This significant political upheaval, following years of war and decades of family rule, further increased demand for gold as a safe haven. Meanwhile, other precious metals saw mixed movements, with silver remaining steady at USD30.99 per ounce, platinum at USD930.20, and palladium rising by 0.6 percent to USD962.10 per ounce.

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