Gold climbed nearly 2% on Monday, with spot prices topping $4,100/oz as the dollar slid and oil fell. Traders now turn to U.S. inflation data due later this week for clues on the Fed's next move.
Spot gold advanced 1.7% to settle at $4,141.14/oz on Monday amid a slide in the dollar. Gold futures rose 1.8% to settle at $4,149.65/oz.
Trade Nation senior market analyst David Morrison said gold was trading below $3,900 last Monday, after selling off since August's high near $4,700. He added that a break above $4,200, held on any pullback, would strengthen the bullish argument.
Strong jobs data weighs on gold
Gold had slipped on Friday after a U.S. jobs report. According to the Bureau of Labor Statistics, nonfarm payroll employment rose by 165k, well above the consensus estimate of 65k. The unemployment rate ticked down to 4.1% from 4.2% in September.
Inflation is running well above the Fed's long-term 2% target. The reading suggested the labor market remained very strong, theoretically giving the central bank more headroom for a rate hike. Higher rate environments tend to weigh on non-yielding assets such as gold.
Oil slump after midterm results helps bullion
Oil gave gold another lift. Brent crude futures shed 5.1% to settle at $92.61 a barrel, after posting their worst weekly performance since late April 2020.
Gold had already surged after a sweeping Democratic victory in the U.S. midterm elections on Tuesday. The results led to expectations that the party would push for an end to the Iran conflict, which triggered the slump in oil prices that helped bullion.
Inflation reports take the spotlight
The October consumer price index and producer price index reports are due on Tuesday and Friday, respectively. The data will be closely perused for cues on the Fed's future rate actions. The BLS will not release standard 12-month percentage change figures for the CPI because of the U.S. government shutdown in 2025.
Source: Investing.com
Trading involves risk.
Risk Disclaimer
