Goldman rises again as US data lessening Fed view

Goldman rises again as US data lessening Fed view

Since March, Gold extended its biggest advance as weak US data lessened expectations of a tightening of the Federal ReserveFederal Reserve, marking a sentiment shift in the precious metals markets.

The dollar fell 2.4% as Treasury yields and Treasury yields fell after a US manufacturing gauge declined more than expected. That has helped increase the allure of the non-yielding metal, which usually has a negative correlation with the dollar and bond rates.

On Tuesday, gold climbed as much as 0.6%, with the dollar sliding to the lowest in more than a week because of improved risk appetite in equity markets. The metal is trading above $1,700 an ounce and closes in on its 50 day moving average last breached in August, which would signal a major change in sentiment.

Gold broke the $1,700 an ounce mark again, meaning that the break below $1,660 -- 1,700 an ounce was for me a false break, said Georgette Boele, analyst at ABN Amro Bank NV. If that continues, we probably have seen the lows for now. Traders are waiting for US non-farm payrolls this week to get more clues on the future path of central bank monetary policy, which will be crucial to the gold outlook. A weaker than expected print could diminish rate hike expectations, further emboldening bullion at a significant technical turning point.

Other US employment data, including job openings and the ADP Research Institute s figures, will also be key this week. The Fed has struggled to weaken the labor market with tighter policy, a part of its battle with decades of hot inflation.

Spot gold rose by 0.5% to $1,708. In London, 64 an ounce was at 11: 01 a.m. and touched a three-week high earlier in the day. The Bloomberg Dollar Spot Index weakened by 0.3% after a 0.5% decline on Monday. It added to its rally on Monday, when it went up 8.8% as short-covering drove it through several key technical levels. Platinum and Palladium went up.

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