Gold and Silver Start the Week Strongly After Rate Hike Expectations Recede
Spot gold as well as silver posted strong gains in the past one week, after rate hike expectations finally recede.
Gold and other precious metals rallied on Friday trading session, and continued to Monday morning trading session, extending gains that was previously triggered by a disappointing U.S. jobs report that weakened the dollar and lent fresh support to precious metals.
Spot gold traded around $4,150 in Monday morning session, while silver held its own above $61 per ounce, correcting slightly after making strong gains on Friday afternoon.
The picture for bullion currently is uncertain but constructive. The payrolls data last week reduced the urgency for another near-term tightening, yet traders are still assigning the probability to another rate increase before the end of this year.
The Strait of Hormuz situation has evolved toward normalized shipping flows, though underlying governance questions remains unresolved. Crude prices have remained low, West Texas Intermediate near $68.7 a barrel and Brent around $72.3, exerting a mildly disinflationary pull that further eases pressure on yields and the central bank. Gold's upward move is considered being propelled more by the reaction to the employment data than by any fresh demand tied to the Iranian conflict updates.
Related assets: Gold, Silver, Palladium, Platinum