WASHINGTON: Spot gold edged higher on Monday, supported by short covering after a weekly loss on Friday due to the Federal Reserve’s cautious stance on rate cuts in the upcoming year.
Spot gold was up 0.2 per cent to $2,626.44 per ounce, as of 0313 GMT. US gold futures eased 0.1 per cent to $2,642.10.
The Fed’s 25-basis-point reduction on Dec. 18 and the cautious note struck by its economic projections and expectations of fewer cuts in 2025 pushed gold to its lowest since Nov. 18 last week.
“We are entering the holiday mode and gold’s mainly been helped by short covering which started on Friday itself and there is some technical support as well,” said Ajay Kedia, director at Kedia Commodities, Mumbai.
On Friday, gold gained on a softer US dollar and Treasury yields when US economic data hinted at a slowdown in inflation.
Data on Friday showed monthly inflation in the US slowed in November after little improvement in recent months. The personal consumption expenditures (PCE) index rose 0.1 per cent last month after an unrevised 0.2 per cent gain in October.
San Francisco Federal Reserve President Mary Daly and two other Fed policymakers on Friday said they felt the central bank would likely resume rate cuts next year but take their time given that the “recalibration phase” was over.
The Russian central bank kept the key interest rate on hold at 21 per cent on Friday to surprise the market.
Higher rates dull non-yielding bullion’s appeal.
Meanwhile, COMEX gold speculators cut net long positions by 16,251 contracts to 203,937 in the week to Dec. 17, data showed on Friday.
“I see good support for gold at $2,595 and resistance would be at $2,664,” Kedia said.
Spot silver rose 0.7 per cent to $29.72 per ounce and platinum climbed 1 per cent to $935.47, while palladium added 0.2 per cent to $922.31.
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