Gold prices eased on Monday and the dollar index strengthened, as investors assessed comments by U.S. Treasury Secretary Janet Yellen on higher interest rates and awaited key U.S. inflation data due later in the week for directional cues.
Spot gold dipped 0.3 percent to $1,885.60 per ounce, while U.S. gold futures were down 0.2 percent at $1,887.70.
Prices gained over 1 percent on Friday after the Labor Department report showed job growth in the U.S. reaccelerated in May but still fell short of economist estimates, helping ease inflation and tapering jitters.
Benchmark 10-year U.S. Treasury yields ticked up after Yellen said that President Joe Biden’s spending plan would be beneficial to the economy, even if it triggers higher inflation and a rate hike move by the U.S Federal Reserve.
The President’s $4 trillion spending plan is positive for the economy, although it may spur inflation that persists into 2022, Yellen said in an interview with Bloomberg News.
Yellen added that a “slightly higher” interest rate environment would be an advantage. Investors await key U.S. inflation data due later this week for more indications about the Fed’s policy outlook.
A European Central Bank policy meeting is due on Thursday, with economists expecting the central bank to maintain its stimulus measures.
The material has been provided by InstaForex Company – www.instaforex.com