Spot Gold It rose 0.7% to $1,878.55 an ounce, as of 0256 GMT, its highest level since May 9, 2022. US the gold Futures also rose 0.7% to $1,883.20.
The dollar index slipped 0.3%.
“Soft US data on Friday boosted gold appeal. The data suggests the Fed’s increased tightening in 2022 is starting to feel its impact on the economy and the Fed may slow its tightening pace,” said OCBC FX strategist Christopher Wang.
Data on Friday showed the U.S. economy added jobs at a solid clip in December, but Fed officials could take some comfort from a moderation in wage gains. Also, activity in the U.S. service industry contracted for the first time in more than 2-1/2 years in December amid weak demand, further evidence that inflation has eased.
Higher interest rates dampen the appeal of gold as an inflation hedge and raise the opportunity cost of holding non-yielding assets.
Market participants will now focus on Fed Chair Jerome Powell’s speech at a central bank conference in Stockholm and US consumer price index data on Thursday.
“This week’s CPI data will be important. Another drop in price pressures could increase appetite for gold while the dollar remains under pressure. However, an unexpected rise in CPI could offset nervous sentiment,” Wong added.
Traders are also keeping a tab on the reopening of borders to top bullion consumer China, which have been closed since the start of the Covid-19 pandemic.
Spot Silver Up 0.9% to $24.03, while platinum added 0.5% to $1,095.58 while palladium gained 0.7% to $1,817.59.
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