Gold rose on Monday as a weaker U.S. dollar offset expectations of further Federal Reserve rate increases. Strong October jobs data had pushed the metal lower on Friday, and traders now wait for Tuesday's U.S. consumer price index report.
Spot gold rose 0.7% to $4,098.03 an ounce on Monday, as a weaker dollar supported bullion. The U.S. dollar Index fell 0.4% to 101.88, while U.S. gold futures gained 0.8% to $4,106.47.
Strong jobs data revives rate-hike concerns
Gold fell 0.4% on Friday and traded around $4,070 an ounce after U.S. data showed employers added 165,000 jobs in October, beating every forecast. The unemployment rate edged lower.
The figures reinforced concerns that the Federal Reserve could raise interest rates further to contain inflation. Separate data showed consumer sentiment unexpectedly improved to a three-month high in early November.
Election and Iran conflict shape the recovery
Before Friday, the metal had recovered above the $4,000 threshold after the midterm elections. Treasury yields and oil prices retreated on expectations that incoming Democrats would push for an end to the Iran conflict.
However, gold remains around 20% below its level before the U.S.-Iran conflict erupted in late February. ANZ analysts described bullion as volatile last week amid an uncertain economic and political environment.
Traders turn to Tuesday's CPI report
Fed officials will receive another employment report and a full set of inflation figures before their December policy meeting, when markets expect another rate increase amid persistently elevated energy prices.
Traders will now focus on Tuesday's U.S. consumer price index report for further clues on inflation and the interest-rate outlook.
Source: Investing.com
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