Rate Edges Higher as Markets React to Jobs Data, Fed’s Rate Hold

The spot price of gold ticked 1% higher to $2,324.56 per ounce as of 1:40 p.m. ET Monday as markets continued to digest last week’s economic news from the latest jobs report to the decision from the Federal Reserve to hold interest rates at their current levels until inflation eases further.

Jobs data released Friday showed hiring was weaker than expected in April but suggested resilience in the U.S. economy, raising optimism about the possibility of rate cuts by the Federal Reserve later this year.

This week, comments will come from a number of Fed speakers, along with consumer confidence data.

Expectations that the Fed will still cut rates later this year would be bullish for gold as rate cuts could weaken the value of the dollar, making gold a cheaper option for foreign buyers to purchase and also lowering the opportunity cost of holding gold compared to interest bearing assets.

With Monday’s gain, the price of gold was still a bit below April’s record highs, though it has climbed more than 12% since the beginning of the year and nearly 15% over the last 12 months.