Gold prices rebound after six consecutive days of losses as dollar strength weakens

Rahul Paswan

(Reuters) - Gold prices rebounded on Monday after six consecutive sessions of losses, buoyed by a stronger dollar as investors awaited comments from Federal Reserve officials on the path of interest rates.

Spot gold rose 1.2% to $2,591.43 an ounce as of 10:27 a.m. GMT, recovering from a two-month low hit on Thursday. U.S. gold futures rose 1% to $2,595.80 an ounce.

Gold prices fell last week for the first time in more than three years as the dollar strengthened amid expectations that the Federal Reserve will slow the pace of its interest rate cuts.

But the dollar was flat, below a one-year high hit on Thursday, having risen 1.6% last week. A weaker dollar makes gold cheaper for buyers holding other currencies.

"The dollar can be seen as the primary reason for the current decline in gold prices. I'm not saying we've hit the bottom in physical terms, but there is clearly some opportunistic buying coming in, supporting the market," said independent analyst Ross Norman.

“As we get closer to the end of the year, we’ll see some volatility, liquidations and profit-taking in gold prices regardless of what the Fed does in December.”

Recent U.S. economic data has dampened expectations of a December rate cut by the Federal Reserve, and at least seven U.S. central bank presidents are scheduled to speak this week.

As interest rates rise, holding non-interest-earning gold becomes less attractive.

"A Trump presidency would likely continue to push up the dollar, which would be negative for gold in the short to medium term," said Michael Langford, chief investment officer at Scorpion Minerals. "However, the policies he announces would likely significantly increase inflation in the long term, which would be positive for gold."

Spot silver rose 1.7% to $30.73 an ounce, platinum rose 1.8% to $955.31 an ounce and palladium rose 1.9% to $968.63 an ounce.