Gold and silver prices extended their upward momentum in the first session of the week, in which the precious metal gold traded right above the 5,000 USD/ounce mark as the USD weakened. Investors are waiting for important US data on jobs and inflation to be released this week to assess interest rate outlook.
Spot gold rose 1.3% to 5,025.97 USD/ounce at 6:50 GMT, after rising about 4% in Friday's session. Gold futures for April delivery in the US rose 1.4% to 5,048.30 USD/ounce.
This may be a short-term correlation in the session between the USD and silver and gold, thereby pushing metal prices up," said Kelvin Wong, senior market analyst at OANDA.
The USD fell to its lowest level since February 4, making greenback-valued metals cheaper for international investors. The Yen appreciated after Japanese Prime Minister Sanae Takaichi won overwhelmingly in Sunday's election.
The hunt for cheap goods is also pushing gold prices back above the 5,000 USD mark," said Tim Waterer, chief analyst at KCM.
Investors are waiting for monthly reports on jobs and the US consumer price index (CPI) this week, and expect the US Federal Reserve (Fed) to cut interest rates at least twice, by 25 basis points each time, in 2026 - with the first cut forecast in June. Gold, a non-performing asset, usually benefits in a low interest rate environment.
Any signs of weakening in job data could support gold price recovery efforts. We do not expect the Fed to cut interest rates before mid-year, unless the labor market declines sharply," Mr. Waterer added.
Chairman of the San Francisco Fed, Mary Daly, said on Friday that she believes it may take another or two waves of interest rate cuts to cope with signs of a weakening labor market.
Meanwhile, spot silver prices increased sharply by 4.7% to 81.55 USD/ounce, after increasing by nearly 10% in the previous session. This metal once set a historical peak at 121.64 USD/ounce on January 29.
If silver cannot overcome the important resistance level at 92.24 USD, I don't really believe in the probability of forming a medium-term uptrend" - Mr. Wong said.
Spot platinum prices edged up 0.2% to $2,099.15/ounce, while palladium rose 1.3% to $1,728.0/ounce.
