Gold Prices Firm as Dollar Weakens, Investors Await U.S,...

Gold prices had a solid start to the week on Monday, finding support in a weakening dollar. This gain came as investors eagerly anticipated the release of U.S. inflation data later in the week, which would provide insights into the Federal Reserve's future interest rate decisions.

- The price of spot gold inched up by 0.1% to reach $1,919.52 per ounce as of 0105 GMT. However, it remained close to the one-week lows recorded on September 6. During the previous week, bullion had experienced a 1% decline. U.S. gold futures held steady at $1,943.

- Concurrently, the U.S. dollar and 10-year bond yields saw a 0.2% decrease. This decline made non-yielding gold more appealing to international buyers.

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On Monday, gold prices experienced an increase, buoyed by a decline in the value of the dollar, with investors eagerly anticipating U.S. inflation data that has the potential to shape the Federal Reserve's decisions regarding interest rates.

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Spot gold, denoted as GOLD, advanced by 0.3% to reach $1,922.89 per ounce as of 0313 GMT, following a 1% decline in the preceding week. Meanwhile, U.S. gold futures, also represented as GOLD, increased by 0.2% to reach $1,946.30.

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Matt Simpson, a senior analyst at City Index, suggests that if the U.S. dollar continues its downward trend on speculations that the Federal Reserve has concluded its tightening cycle and might consider rate cuts sooner than expected, gold is likely to find support above the $1,900 threshold.

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He mentioned that gold had received backing from its 200-day moving average, a significant technical level that is challenging to breach. He also noted that if U.S. inflation falls short of expectations, it could exert additional downward pressure on the U.S. dollar.

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A 0.3% decline was observed in both the U.S. dollar and the benchmark 10-year bond yields, rendering non-yielding bullion more appealing to international buyers.

According to Tim Waterer, Chief Market Analyst at KCM Trade, "To once more target the $1,950 level, it is probable that the precious metal will need a retracement in yields."

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