By: Economy Middle East

Gold traded near a two-week high on Monday after weaker-than-expected U.S. employment data reinforced expectations that the Federal Reserve may adopt a less aggressive approach to monetary tightening. Investors are now looking ahead to the release of the Fed’s latest meeting minutes for further signals on the interest rate outlook, while UAE gold prices remained largely unchanged.

Spot gold slipped 0.58 percent to $4,158.05 an ounce as of 9:03 a.m. UAE time after touching its highest level since June 22 earlier in the session. U.S. gold futures for August delivery rose 1.03 percent to $4,168.20 an ounce.

In the UAE, 24-carat gold was unchanged at AED503.00 per gram, while 22-carat gold held at AED466.00. The price of 21-carat gold stood at AED446.75, 18-carat gold at AED383.00, and 14-carat gold at AED298.75.

Softer labor market supports gold

The U.S. dollar gained about 0.1 percent, making dollar-denominated bullion more expensive for holders of other currencies. Even so, gold remained supported after posting a gain of more than 2 percent last week, ending a four-week losing streak.

The rally followed data showing that U.S. job growth slowed sharply in June, while payroll figures for the previous two months were revised lower. The weaker labor market data eased concerns that inflation would remain elevated and prompted investors to reduce expectations for another near-term Federal Reserve interest rate increase.

Markets now assign roughly a 55 percent probability of a September rate hike, down from more than 60 percent before the payrolls report, according to CME FedWatch estimates. Lower interest rates generally benefit gold because the precious metal does not generate interest income.

Investors are now awaiting the minutes of the Federal Reserve’s June 16-17 policy meeting, scheduled for release on Wednesday, for additional insight into policymakers’ outlook.

JPMorgan said demand from key gold-buying sectors is likely to be weaker than previously anticipated, limiting the upside for bullion prices this year. The bank expects gold to average around $4,300 per ounce during the third quarter before rising to about $4,500 in the fourth quarter.

Among other precious metals, spot silver fell 1.31 percent to $61.73 an ounce after earlier reaching its highest level since June 23. Platinum declined 0.69 percent to $1,640.50 an ounce, while palladium edged down 0.08 percent to $1,250.00 an ounce.