Spot gold dropped 0.2% to $2,653.00 per ounce following last week’s rally
Gold prices hovered just below last week’s record high on Monday, with bullion set for its best quarter in over eight years after this month’s U.S. interest rate cut and expectations of another jumbo cut in November.
Spot gold dropped 0.2% to $2,653.00 per ounce, as of 0817 GMT, as traders locked in profits following last week’s rally. U.S. gold futures gained 0.2% to $2,674.40.
Bullion has gained more than 14% so far this quarter, its best quarterly performance since January 2016.
On a monthly basis, gold has gained 6% in September after scaling a peak of $2,685.42 last Thursday, driven by the U.S. Fed’s 50 bp cut, China’s stimulus measures and escalating strife in the Middle East.
Gold still looks poised to have a potential run at $2,700 if labour market data this week aligns with the potential of another 75 bps of easing from the Fed by year-end, according to Tim Waterer, chief market analyst at KCM Trade.
Fed Chair Jerome Powell and Governor Michelle Bowman are expected to deliver speeches later in the day, which could offer insights on the policy outlook.
Market is looking ahead for some risk event today, especially a slew of Fed officials speaking, said Kelvin Wong, OANDA’s senior market analyst for Asia Pacific.
This week’s data lineup includes U.S. ADP employment figures and nonfarm payrolls, which may provide further clarity about the condition of the U.S. labour market.
Data on Friday showed that the U.S. economy retained some of its solid momentum in the third quarter, while inflation pressures continued to abate. This boosted expectations of another outsized interest rate cut at the Federal Reserve’s November policy meeting.
Zero-yield bullion tends to be a preferred investment in a low interest rate environment and during geopolitical turmoil.
