Mubasher: Gold prices edged higher on Monday amid growing expectations of monetary policy easing by major central banks led by weaker economic figures, helping the yellow metal to remain above the $1,500 level, Reuters reported.
By 10:44 am GMT, spot gold rose by 0.20% to $1,509.77 per ounce, after dropping by around 1% in the prior session, while US gold futures went up by 0.13% to $1,517.40 per ounce.
“We are seeing short-term weakness [in gold prices], but in the long term the trajectory is still bullish.”
Global equity markets rallied on news that China’s central bank was lowering the reserve requirement ratios (RRRs), releasing liquidity to support the economy against the impact of the trade conflict between the US and China.
Remarks from Federal Reserve Chairman Jerome Powell, who vowed to act “as appropriate” to maintain the US economy on growth track, also lent support to risk-on sentiment.
Meanwhile, China’s exports dropped last August as US-bound shipments plunged, underlining further weakness in the world’s biggest second economy, which building the case for the need for more stimulus measures.
In addition, US job growth was slower than expected last August, as per shown by the Labor Department’s non-farm payrolls report.
Such figures pointed to frailty in the world’s top economy, according to a note by OCBC Bank economist Howie Lee.
“With the [European Central Bank] and Fed primed to further ease monetary conditions this month, it is unlikely gold will dip below $1,500/oz in the short-term,” Lee’s note was quoted by Reuters.