Gold near two-month high supported by hopes for US rate cut in June

Gold prices remained close to their highest levels in two months on Monday, after weak economic readings in the United States last week raised the possibility of the Federal Reserve cutting interest rates in June.

By 06:30 GMT, gold in spot transactions fell 0.1% to $2,081.34 per ounce, but hovered near the $2,088.19 level it recorded on Friday, when it reached its highest levels since December 28.

According to Reuters, US gold futures fell 0.3% to $2,090.10.

Edward Meir, an analyst at Marks Financial Services, said: “What happens on the interest rate front is the main driver for gold, and we saw a move higher in gold prices on Friday because a series of macroeconomic data released in the United States pushed expectations towards the Federal Reserve cutting interest rates in “Sooner than expected.”

Gold prices increased by about $50 last week, with all gains achieved without exception in the last two days against the backdrop of weak data on spending in the manufacturing and construction sectors in the United States and declining price pressures according to the Federal Reserve Bank’s preferred inflation measure.

The London Stock Exchange Group’s interest rate movement probabilities application indicates that traders have raised their hopes for a cut in interest rates in June and now see a 74 percent chance of that happening, compared to about 65 percent last Monday.

Low interest rates increase the attractiveness of gold, which does not generate a return.

The next major US economic data will be the February employment report due on Friday.

Regarding other metals, the spot platinum price fell 0.6% to $881.22 per ounce, and palladium stabilized at $955.71. The two metals have fallen more than 10% since the beginning of the year.

Platinum mining companies in South Africa are facing a crisis in light of the decline in prices of the metal used in the automobile industry.

Silver fell in spot transactions by 0.6% to $23.01.