Gold and SPDR Gold Trust (ETF) (NYSEARCA:GLD) prices rallied on Monday ahead of important meetings of monetary regulators in the U.S. Europe and Asia. Fading hopes that the U.S. Federal Reserve will raise interest rates soon can also been seen stoking appetites for gold and other safe-haven assets.
Contracts for August delivery touched an intraday high of $1,287.10 a troy ounce on New York Mercantile Exchange’s Comex division during Asian trading hours. The yellow metal was last seen at $1,285.20, suggesting a 0.73% lift over the previous close.
Today’s gains in gold trading builds on last week’s positive rally that saw the bullion register a 2.7% weekly gain. Gold has gained 6% so far this month, on the pace to making up for the more than 6% loss in the prior month. The precious yellow metal is up nearly 20% in 2016 and it hit a 30-year high in 1Q2016.
Gold should draw benefit from weaker global economic data. For example, U.S. labor data that showed that only 38,000 jobs were created in May caused investors to rule out immediate interest rate hikes by the Fed. The number of jobs added in the U.S. last month was the lowest in nearly six years and helped create the perception among investors that federal monetary regulators would hold off interest rate increases until there is a sign that the domestic economy is on a strong recovery path.
Central bank meetings
Today’s rise in gold can also be attributed to anxiety over the coming central bank meetings. Central banks in the U.S., Switzerland, the U.K. and Japan are set to meet this week.
The yellow metal should also benefit from uncertainty caused by the forthcoming Brexit vote that will determine whether England remains part of the European Union or breaks from the economic bloc. Some economists have warned that England’s exit from the EU could have a devastating global economic impact, and such sentiment appears to fuel appetite for gold and other safe-haven assets.