Gold prices firmed on Monday, supported by a weaker dollar and lower Treasury yields following dovish comments from U.S. Federal Reserve Chair Jerome Powell, which bolstered expectations for a September rate cut. Spot gold rose 0.4% to $2,520.39 per ounce, after gaining more than 1% in the previous session, while U.S. gold futures also increased by 0.4% to $2,556.00.
Powell endorsed an imminent rate cut, suggesting that further cooling in the job market would be unwelcome. The dollar hovered near a 13-month low, making gold cheaper for other currency holders, while benchmark 10-year Treasury yields also fell.
Analysts suggest that if the dollar remains weak, gold prices could approach $2,550 this week. Market expectations indicate a high likelihood of a rate cut next month, with potential cuts of either 25 or 50 basis points.