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Gold rises as U.S. Treasury yields ease


Spot gold was 0.4% higher at $2,330.56 per ounce, after sliding 1% on Friday due to a stronger dollar

Gold prices rose on Monday as U.S. Treasury yields eased, while investors awaited inflation numbers due later this week that could influence the Fed’s interest rate policy.

Spot gold was 0.4% higher at $2,330.56 per ounce as of 0834 GMT, after sliding 1% on Friday due to a stronger dollar. U.S. gold futures added 0.5% to $2,343.30.

Benchmark 10-year U.S. Treasury yields edged down, making non-yielding bullion more attractive for investors.

The focus remains on incoming U.S. economic data and if that data confirms a soft landing, allowing the Fed to reduce interest rates, according to UBS analyst Giovanni Staunovo.

We continue to see gold supported, targeting a price of $2,600 per ounce at the end of the year, Staunovo added.

The PCE data, Federal Reserve’s preferred measure of inflation is due on Friday. Through this week, at least five Fed officials will speak, including San Francisco Fed President Mary Daly, Fed Governors Lisa Cook, and Michelle Bowman.

Traders are currently pricing in a 66% probability of Fed rate cut in September, shows the CME FedWatch Tool.

Lower rates reduce the opportunity cost of holding bullion.

Data on Friday showed that U.S. business activity crept up to a 26-month high in June but price pressures reduced significantly.

Among other precious metals, spot silver gained 0.5% to $29.68 per ounce and platinum added 0.6% to $998.35.

Palladium added 4.6% to $992.53. In the previous session, prices reached a one-month high and briefly broke above the key level of $1,000 per troy ounce in volatile trade as some investors covered their short positions and the market was tight for nearby physical supply.

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