Gold gains on dollar pullback; investors weigh Fed rate hike prospects.

Gold rose on Monday as the dollar eased slightly, but prices were off one-year highs hit last week, as mixed economic data prompted investors to reassess the US Federal Reserve’s interest rate hike trajectory, according to Reuters.
Spot gold was up 0.5 percent at $2,012.62 per ounce as of 0646 GMT. US gold futures rose 0.4 percent to $2,024.70.
The dollar index was 0.1 percent lower, making bullion cheaper for overseas buyers.
Gold is likely to trade with “positive bias but can see some initial correction…a major downfall” in prices is not expected as uncertain global economic and geopolitical tensions support its safe-haven status, said Hareesh V, commodity research head, Geojit Financial Services.
Gold dropped 2 percent on Friday after data showed resilience in US core retail sales in March.
Other data showed households expected inflation to rise over the next 12 months. Separately, production at US factories fell in March but eked out a modest gain in the first quarter.
“Gold also maintains a strong correlation with real yields, and price action continues to be sensitive to US inflation and employment data,” Standard Chartered analyst Suki Cooper said in a note.
On Friday, Fed Governor Christopher Waller said US central bankers still need to move interest rates higher. On the other hand, Atlanta Fed President Raphael Bostic said one more quarter-percentage-point hike could allow the Fed to end its tightening cycle.
The CME FedWatch tool shows markets are pricing in an 82.2 percent chance of a 25 basis point hike in May, dimming non-yielding bullion’s appeal.
“While $2,075-$2,100/oz remains a key hurdle…we remain biased for a grind higher,” Citi said in a note, adding financial stability stress presents positive tailwinds for long-duration safe-haven assets such as gold.
Spot silver rose 0.5 percent to $25.45 per ounce, platinum dipped 0.3 percent to $1,042.01 and palladium fell 0.5 percent to $1,496.41.

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