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Gold prices experienced a strong rebound on Monday, rising around 1% following last week’s losses, as the U.S. dollar rally showed signs of slowing. The precious metal gained ground amid anticipation of comments from Federal Reserve officials, which are expected to provide clues on future interest rate decisions.
As of 4:50 ET (9:50 GMT), spot gold had climbed 1.2% to $2,593 per ounce, while U.S. gold futures increased by 1% to $2,597. The recovery followed a six-day losing streak for gold, marking a welcome change for investors.
Gold’s Recent Decline and Market Factors
Gold has faced significant pressure recently, with prices dropping 6% since the U.S. presidential election on November 5. This marked the worst post-election week for gold since 1980, when Ronald Reagan became president, according to a note from UBS analysts. The strong U.S. dollar, which rose 1.6% last week, contributed to gold’s decline, as a stronger dollar makes gold more expensive for investors using other currencies.
Focus on Federal Reserve Guidance
Market participants are closely watching this week’s lineup of speeches from several U.S. Federal Reserve officials. Strong economic indicators, such as robust retail sales data released last week, have fueled discussions among Fed policymakers about the necessity of maintaining higher interest rates for longer. As a result, expectations for a December rate cut have diminished.
The interaction between economic strength and inflation concerns will continue to shape the outlook for monetary policy, impacting gold’s appeal as an inflation hedge and a non-yielding asset.
