Gold Edges Higher As Fed Bets Ease

Gold prices inched higher on Monday, the dollar resumed its slide and yields on government bonds retreated from their 2022 highs amid bets that the Federal Reserve might slow the pace of interest-rate hikes.

Data on U.S. personal consumption expenditure price index released on Friday signaled that inflationary pressures could be easing and raised hopes for a pause in the rate hike cycle after two 50 basis point hikes each in June and July.

Spot gold edged up 0.2 percent to $1,857.84 per ounce, while U.S. gold futures were up 0.2 percent at $1,854.90.

The upside remained capped as equity markets continued to rally amid signs of easing COVID-19 curbs and the announcement of more stimulus measures in China.

Beijing announced a partial reopening of some libraries, museums and gyms and resumed most of public transport in the main business area and ended work-from-home rules in some districts.

Shanghai, which was under a strict lockdown for nearly two months, would lift some of the curbs on businesses from Wednesday and offered more help for firms that includes reducing some taxes for car buyers, delaying insurance and rent payments, as well as subsidies for utility charges.

Authorities in Shanghai rolled out a total of 50 stimulus measures to support the local economy, which has been hit hard by the restrictions.

This week’s economic calendar in the U.S. features jobless claims data, a couple of speeches by Fed officials, manufacturing and service sector activity numbers, the Fed’s Beige Book report and the monthly jobs report.

EU leaders will start a two-day special meeting in Brussels later in the day to debate the sixth package of sanctions to punish Moscow.

The EU failed on Sunday to agree on an embargo of Russian oil over Moscow’s invasion of Ukraine.

The Fed is set to start shrinking its $8.9 trillion balance sheet starting Wednesday.

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