Gold prices gain ground as dollar tapers off
Gold prices rose in European trade on Monday, resuming their recovery from a one-week low as the US dollar slows down.
Now investors await a batch of data this week that will help determine the likely bath ahead for US monetary policies.
Gold Prices Today
Gold prices rose 0.6% to $1,930 an ounce, with a session-low at $1,916, after losing 0.05% on Friday, approaching a one-week low at $1,915.
The precious metal lost 1.1% last week, the first weekly loss in three weeks following a spate of US positive data, which bolstered the case for another US interest rate hike this year.
The Dollar
The dollar index fell 0.5% on Monday on track for the first loss in five sessions off six-month high at 105.15 against a basket of major rivals.
Dollar is tapering off ahead of important US data this week, including consumer prices and producer prices data.
If the data beat expectations, it'll strengthen the likelihood of another US interest rate hike in November.
The Federal Reserve
Ahead of the Fed's September meeting, most remarks from Fed officials indicated the Fed won't raise interest rates this month.
US Rates
Pricing for a 0.25% Fed interest rate hike at the September meeting stands at just 7%.
However, pricing for a 0.25% US interest rate hike in November stands at a stronger 45%.
The SPDR
Gold holdings at the SPDR Gold Trust remained flat on Friday for a second session at a total of 886.64 tonnes, the lowest since August 28.
Euro extends recovery on European interest rate prospects
Euro rose in European trade on Monday against a basket of major rivals, moving off three-month lows against US dollar on expectations the European Central Bank will raise interest rates once more this week.
However, euro could easily tumble below $1.07 if the ECB decided not to raise interest rates this week or sounded out a bearsh outlook for the future.
EUR/USD rose 0.25% to 1.0741, with a session-low at 1.0707, after losing 0.7% last week, the eighth weekly loss in a row, and the longest such streak of weekly losses since July 2014 as the gap in treasury yields widen between the US and Europe.
ECB
The European Central Bank is convening on Thursday to discuss policies in the euro zone and take appropriate decisions based on recent data.
According to latest remarks by ECB officials, there will likely be a split in opinions and decisions at this week's policy meeting.
Recent weak European data hinted at upcoming recession, which in turn could drag inflation rates down.
such developments could force the ECB to shun another interest rate hike this week.
Bleak Outlook
There's a genuine chance the European Central Bank won't change its monetary policies and maintain interest rates unchanged.
Such a decision would be damaging to the euro's standing against dollar and other major rivals.
However, even more focus is put on the ECB's future outlook statements, and whether it's interested in carrying on the current path of policy tightening, even as the euro zone economy slows down.
Gold edges up as markets assess data and statements by Fed officials
Gold prices mostly stabilized on Friday as the dollar lost ground against most major rivals while markets assess latest bullish statements by Fed officials on the future path of monetary policies.
Recent US data showed unemployment claims fell by 13 thousand to 216 thousand in the week ending September 2, the lowest since February.
Such data reflects the flexibility of the US labor market, which reinforced uncertainty about the Fed's upcoming policy moves, and raises the chance of another US interest rate hike this year.
In fact, pricing for another US interest rate hike at the Fed November meeting now nearly stands at 50%.
Otherwise, the dollar index fell 0.1% as of 18:20 GMT to 104.9, with a session-high at 105.07, and a low at 104.6.
Gold spot prices stabilized positively at $1,942 an ounce as of 18:20 GMT.
Wall Street gains ground but heads for weekly losses
US stock indices rose on Friday amid uncertainty about the Federal Reserve's monetary policies, with Wall Street heading for weekly losses.
Recent US data showed unemployment claims fell by 13 thousand to 216 thousand in the week ending September 2, the lowest since February.
Such data reflects the flexibility of the US labor market, which reinforced uncertainty about the Fed's upcoming policy moves, and raises the chance of another US interest rate hike this year.
In fact, pricing for another US interest rate hike at the Fed November meeting now nearly stands at 50%.
On trading, Dow Jones rose 0.3%, or 95 points to 34,595, while S&P 500 rose 0.3%, or 11 points to 4,462, as NASDAQ added 0.2%, or 23 points to 13773.