Gold prices were higher during European morning hours on Monday, starting the week off with gains as investors turned their attention to elections in Europe, while preparing for a potential rate hike by the Federal Reserve this week.
Comex gold futures rose $8.15, or around 0.7%, to $1,209.55 a troy ounce by 4:10AM ET (08:10GMT).
It settled lower for the ninth session in a row on Friday, hitting its weakest since January 31 at $1,194.50 after solid U.S. employment data reinforced expectations of a Fed rate hike this week.
Meanwhile, spot gold was up $5.20 at $1,210.10 per ounce.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.3% at 101.06 in London morning trade.
It fell to a two-week low of 100.86 earlier amid disappointment that the latest U.S. employment report showed that U.S. wage growth remained tepid.
As the Fed meets in the coming week, there are other issues that will get the attention of markets. The Dutch election on Wednesday is being watched as a bellwether for the spread of populism in Europe, particularly ahead of next month’s French election.
Opinion polls have suggested that Dutch nationalist Geert Wilders’ right-wing Freedom Party, which wants to take the Netherlands out of the European Union and stop Muslim immigration, has lost its lead to more mainstream opponents.
Meanwhile, the Fed is scheduled to conclude its two-day policy meeting on Wednesday, with most market participants expecting the U.S. central bank to raise the fed funds target range by a quarter point, which would put it in a range between 0.75%-1%.
Fed Chair Janet Yellen‘s post-meeting press conference will be closely watched for clues on the pace of future rate hikes. Fed officials previously projected three rate hikes in 2017, but that might move up to four.
Source: UK Investing.com