(London) Gold benefited Tuesday from expectations of rate cuts in the coming months, while the dollar hesitated in the face of mixed economic data.
Around 5:50 a.m., the dollar remained generally stable against the euro, down slightly by 0.03% to $1.0740.
The greenback fell against the pound, which nibbled 0.11% to 1.2566 dollars.
For its part, after a long Easter weekend where most stock markets around the world were closed, gold continued to advance, gaining 0.37% to $2,259.80 per ounce, after setting a new record at $2266.85.
The precious metal has “increased sharply while we are only two months away from the possible kick-off planned for June” by the “monetary easing” market of the European Central Bank (ECB), the Bank of England (BoE) and the Federal Reserve (Fed), summarizes Joshua Mahony, analyst at Scope Markets.
Investors in fact anticipate the fact that “when interest rates fall”, “gold becomes relatively more attractive compared to assets” such as bonds, “which then offer lower returns”, details Matthew Weller, analyst at CityIndex.
Last Friday, the PCE index, favored by the Fed to gauge inflation, reported that consumer prices rose 2.5% year over year in February, an acceleration from the 2. 4% in January, in line with market expectations.
On the other hand, the rise in consumer prices slowed to 0.3% over one month compared to 0.4% the previous month, which could encourage the Fed to lower its rates.
Expectations of rate cuts were, however, somewhat attenuated on Monday by manufacturing activity in the United States which started to rise again in March, after 16 consecutive months of contraction according to the professional federation ISM.
Forex traders should also closely scrutinize the monthly ADP report on job creation in the American private sector for March, expected Wednesday, and the unemployment rate in March in the United States expected Friday.