(Nov 18 - Reuters) Gold prices staged a notable rebound on Monday, breaking a six-session losing streak and signaling potential shifts in global financial sentiment. The precious metal rose over 1.5%, recovering from a two-month low and offering investors a glimmer of hope amid complex economic conditions.
Spot gold surged 1.6% to $2,603.32 per ounce, with U.S. gold futures increasing 1.48% to $2,608.35. The market movement comes as the U.S. dollar's recent rally temporarily halts, creating more favorable conditions for gold investors.
Independent analyst Ross Norman provided critical insights into the market dynamics: "We can look to the dollar for a significant part of the current gold price corrections... clearly, some opportunistic buying is coming in to support the market." Norman also cautioned that as the year ends, volatility in gold prices is expected, with potential book clearing and profit-taking regardless of the Federal Reserve's December actions.
The market remains sensitive to Federal Reserve policies, with at least seven U.S. central bank officials scheduled to speak this week. Recent economic data has reduced expectations for a December rate cut, which continues to impact gold's performance. Higher interest rates traditionally make holding gold less attractive, as the precious metal does not pay interest.
Michael Langford, Chief Investment Officer at Scorpion Minerals, offered a broader perspective on gold's future: "President Trump's inauguration is likely to see an ongoing strengthening of the USD, which is negative for gold in the short to medium term. However, as his stated policies are likely to be significantly inflationary in the long term, this will benefit gold."
The broader precious metals market also showed positive momentum. Silver rose 2.4% to $30.98 per ounce, platinum added 1.97% at $962.34, and palladium climbed 3.84% to $976.50.
While challenges persist, the gold market's recent rebound underscores the complex interplay between monetary policy, currency movements, and investor sentiment. Investors are advised to remain vigilant and monitor upcoming Federal Reserve communications for potential market shifts.
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