Gold is trending upwards as the dollar dips

Gold prices increased during European trading on Monday, rebounding after a two-day decline from record highs. This uptick coincided with a drop in the dollar against other major currencies.

Investors are anticipating interest rate cuts by the Federal Reserve, expected to commence in June, which diminishes the attractiveness of the US dollar.

Gold Price

Gold prices climbed by 0.6% to reach $2178 per ounce, with a session low of $2163, following a 0.75% decrease on Friday, marking the second consecutive decline after reaching record highs at $2222.

The precious metal reached its record peak on March 21, driven by expectations of 75 basis points of rate cuts by the Fed this year, despite recent robust US inflation figures.

Additionally, after cautious policy meetings by central banks in the UK, Japan, Switzerland, and the US, gold prices surged by 0.5% last week, marking the fourth weekly gain in five weeks.

The Dollar

The dollar index dropped by 0.2% on Monday, retreating from five-week highs at 104.50 against a basket of major currencies.

The dollar has weakened as investors await further data and indications about the future path of US interest rates throughout the year.