By Daksh Grover
(Reuters) – Gold prices edged up on Monday as investors assessed China’s weekend stimulus announcement, while also focussing on U.S. Federal Reserve officials’ comments for further rate cut cues.
Spot gold rose 0.2% to $2,660.64 per ounce by 0800 GMT. Bullion rose nearly 1% in the previous session.
U.S. gold futures were steady at $2,677.90.
The potential commitment to fiscal stimulus from China suggests a healthier economy, which bodes well for gold demand but the market needs to see more concrete measures, said Tim Waterer, chief market analyst at KCM Trade. [GOL/AS]
China on Saturday said it would “significantly increase” debt to revive its sputtering economy, but left investors guessing on the overall size of the stimulus package.
Investors will watch out for comments from Fed officials this week for more hints on the upcoming rate cuts, along with U.S. retail sales data.
“If the Fed speakers this week create some further doubt over how many rate cuts could occur between now and year-end, any resulting upside in the dollar could see gold support levels around $2,600 again being tested,” Waterer said.
Data on Friday showed unchanged U.S. producer prices last month, cementing the case for quarter-point U.S. interest-rate cuts at upcoming Fed policy meetings.
Traders see a roughly 90% chance of the Fed cutting rates by 25 basis points at its November meeting, and 10% chance of it leaving rates unchanged.
The zero-yielding bullion is preferred in a low-interest rate environment.
The dollar index rose 0.1%, putting pressure on greenback priced-metals. A stronger dollar makes them less attractive to other currency holders. [USD/]
Spot silver fell 0.2% to $31.48 per ounce and platinum was nearly unchanged at $985.00.
Palladium extended its decline, falling 0.3% to $1,066.00.
(Reporting by Ashitha Shivaprasad and Daksh Grover in Bengaluru; Editing by Rashmi Aich, Sonia Cheema and Sumana Nandy)
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