Gold Holds Gain as Traders Seek Safety From US Rate Uncertainty

(Bloomberg) — Gold held a four-day rally, with traders seeking refuge in the haven asset as risk-off sentiment swept markets on fresh uncertainty over the Federal Reserve’s rate path.

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Bullion traded near its highest in a month at around $2,690 an ounce, after notching a 1.9% gain last week despite headwinds from stronger bond yields and a stronger dollar. A report on Friday showed exceptional resilience in the US labor market, causing economists at some big banks to revise down forecasts for additional rate cuts.

While higher borrowing costs are typically negative for the non-interest bearing precious metal, investors are bracing for more volatility ahead of Donald Trump’s return to the White House. A raft of stronger-than-expected data last week saw traders scale back equity risk in favor of haven assets such as the dollar and gold, Pepperstone Group Ltd. Head of Research Chris Weston said in a note.

Investors are now shifting focus to US inflation figures due later this week, with the consumer price index report scheduled for release on Wednesday. They’ll also be watching the New York Fed’s one-year inflation expectations due Monday, producer prices on Tuesday and jobless claims on Thursday.

Spot gold was little changed at $2,689.71 an ounce as of 8:35 a.m. in Singapore. The Bloomberg Dollar Spot Index was flat. Silver and palladium were steady, while platinum declined.