Gold futures traded on a positive note Monday, with bulls looking to build on gains accumulated last week as the U.S. dollar weakened and the Federal Reserve affirmed expectations for a rate cut at the end of the month.
Gold for August delivery on Comex GCQ19, -0.01% is up 90 cents, or 0.1%, at $1,413.10 an ounce, while September silver SIU19, +0.65% rose 8.4 cents, or 0.6% to $15.32 an ounce.
“The market still expects the Fed to cut interest rates at its next meeting late this month following the very strong hints to this effect given by Fed Chair Powell during his testimony before the U.S. Congress last week,” wrote analysts at Commerzbank, in a Monday note. “What is more, Chicago Fed President Evans spoke out on Friday in favor of a couple of rate cuts in order to boost inflation above the Fed’s 2% target.”
Gold logged a 0.9% rise last week. Powell, in testimony before House and Senate lawmakers over two days, offered no pushback to market expectations for a rate move when policy makers meet July 30-31, analysts said. The U.S. dollar weakened amid the Fed’s dovish outlook. A weaker dollar can be a positive for commodities priced in the unit, making them cheaper to users of other currencies.
Read: Good data or not, UBS still expects a half-point rate cut
The ICE U.S. Dollar Index DXY, +0.14% a measure of the currency against a basket of six major rivals, was up 0.1% on Monday. Gold and other commodities often trade in an inverse relationship to the currency.
In other metals trade, October platinum PLV19, +1.58% rose $12.10, or 1.4%, to $846.70 an ounce, while September palladium PAU19, +1.06% jumped $22, or $1.4%, to $1,564 an ounce.
September copper HGU19, +0.39% gained 2.8 cents, or 1%, to $2.722 a pound.