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Gold prices on Monday rose off a two-month low as investors wagered that stimulus from central banks will remain in place for the foreseeable future, bolstering the case for bullion, despite a powerful rebound from equities off their lows in the U.S.
“The global economic recovery will still require further aid and gold prices should still be supported over the medium-term,” wrote Edward Moya, senior market analyst at brokerage Oanda, in a daily research note.
The moves higher for gold on Monday come after the commodity closed out Friday’s trade lower and notched a sharp weekly slide, following an unexpected rise in U.S. jobs for May and a drop in the nation’s unemployment rate to 13.3% from 14.7%, pushing prices for the haven metal to their lowest finish since April.
“Gold prices are shrugging off the last week’s decline on hopes the Fed will not tap the breaks in supporting the US economic recovery,” Moya speculated.
August gold GCQ20, +0.79% on Comex climbed $16.90, or 1%, at $1,699.90 an ounce, after finishing last week’s trade at the lowest level since early April and notching a weekly decline of 3.9%, according to FactSet data based on the most-active contracts.
Meanwhile, July silver SIN20, +2.26% added 37 cents, or 2.1%, to trade at $17.855 an ounce, settling at its lowest level in two weeks, following a 5.5% weekly decline on Friday.
Meanwhile, equities were heading higher, looking to add to gains in the U.S., as investors watched the Federal Reserve, which was set to release on Wednesday an updated policy statement at the conclusion of its two-day meeting on Wednesday.
