Gold rebounds after six straight sessions of losses as dollar rally pauses

Rahul Paswan

(Reuters) - Gold prices rebounded on Monday after six sessions of losses, helped by a pause in the dollar’s rally as investors awaited comments from Federal Reserve officials on the trajectory of interest rates.

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

Gold prices posted their biggest weekly drop in more than three years last week as expectations of a smaller rate cut from the Federal Reserve and a rise in the dollar helped push prices higher. [GOL/]

However, the dollar was flat below a one-year high hit on Thursday after rising 1.6% last week. A weaker dollar makes gold cheaper for buyers holding other currencies. [USD/]

Independent analyst Ross Norman said: "We can look at the dollar as a big part of the reason for the current pullback in gold prices... I'm not saying you've found a solid physical bottom, but clearly some opportunistic buying is coming in to support the market."

“As we head into the end of the year, we’re going to see volatility in gold prices and some liquidation and profit-taking regardless of what the Fed does in December.”

Recent U.S. economic data has dampened expectations that the Federal Reserve will cut interest rates in December. At least seven U.S. central bank officials are scheduled to speak this week.

Higher interest rates make holding gold, which pays no interest, less attractive.

"President Trump's inauguration will likely drive continued dollar strength, which is negative for gold in the short to medium term," said Michael Langford, chief investment officer at Scorpion Minerals. "However, as the policies he announces are likely to significantly push inflation higher in the long term, this will 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.