Gold firmed on Monday as the dollar hovered near its lowest level in more than three years, while the market's focus shifted to a slew of U.S. jobs data due later this week that may influence the Federal Reserve's rate cut trajectory. Spot gold rose 0.7% to $3,294.57 per ounce as of 0815 GMT, after hitting its lowest since May 29 earlier in the session. Bullion has risen 5.4% so far this quarter Get the latest news from India and how it matters to the world with the Reuters India File newsletter. Sign up here. U.S. gold futures gained 0.6% at $3,305.50.
The U.S. dollar index hovered near its lowest level since March 2022. A weaker dollar makes greenback-priced bullion less expensive for other currency holders. "I see two factors which are interlinked supporting gold. A weaker U.S. dollar and the ongoing pressure of President (Donald) Trump on the U.S. Federal Reserve to cut interest rates," said Giovanni Staunovo, an analyst at UBS. Trump said on Friday he would not appoint anyone to head the Federal Reserve who would not support lowering interest rates. On the U.S. data front, investors awaited the ADP employment report due on Wednesday, and non-farm payrolls
"The focus remains if the data suggests a further slowdown in economic activity, allowing the U.S. central bank to cut interest rates," Staunovo added. Investors are anticipating 65 basis points worth of Fed rate cuts by the end of this year, starting in September. Gold tends to gain appeal in a low-interest rate environment, as it offers no yield. On the trade front, Canada scrapped its digital services tax targeting U.S. technology firms late on Sunday, just hours before it was due to take effect, in a bid to advance stalled trade negotiations with the United States. Spot silver rose 0.5% to $36.16 per ounce, platinum firmed 1.9% to $1,364.72, while palladium was up 1.5% at $1,150.30.
