Gold shines with anticipation of US inflation data

Gold prices rose on Monday as the dollar weakened as investors await key US inflation data due this week that could influence the Federal Reserve’s monetary policy stance.

Spot gold rose 0.2 percent at $2,020.80 an ounce by 0634 GMT. And US gold futures rose 0.2 percent to $ 2029.30.

The dollar index fell 0.1 percent, making the yellow metal more attractive to buyers abroad.

US CPI data is due out on Wednesday.

Tim Waterer, chief market analyst at KCM Trade, said any signs of declining inflation would weaken the US currency due to expectations the Federal Reserve will cut interest rates, which could lead to a rally in gold.

Waterer added that gold would be among the “major beneficiaries” if there are further signs of weakness in the US economy and prices could move to $2,100 sooner rather than later.

Economic uncertainty and low interest rates increase the demand for non-yielding bullion.

As for other precious metals, spot silver rose 0.1 percent to $25.67 an ounce.

Platinum rose 0.5 percent to $1,064.03, and palladium rose 1.5 percent to $1,513.11.