Gold prices rose in early Monday trading, reaching a six-week high. The precious metal is finding support as risk appetite fades in financial markets and the US dollar softens. Futures for major stock indices, including the tech-heavy Nasdaq, are trading lower at the start of the session, signalling reduced risk appetite in Asian markets following the release of weak Chinese PMI data — a development that has benefited safe-haven gold. At the same time, the US dollar has slipped to a two-week low as traders increase their bets on lower interest rates in the world’s largest economy. Several senior Federal Reserve officials have made dovish remarks in recent public appearances, reinforcing the perception that the central bank’s internal bias points towards further rate cuts in December and beyond. This dynamic has weighed on the dollar and supported bullion, due to the inverted price correlation between the two assets. Against this backdrop, the path of least resistance for gold prices remains to the upside, with further gains possible.
Ricardo Evangelista, ActivTrades
Source: ActivTrader
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