Gold rises on weaker US dollar ahead of US data

Gold prices rose on Monday as the U.S. dollar slipped after last week’s rally though investors are watching for inflation data from the United States later this week for signs of the intensity of expected U.S. interest rate increases.

Spot gold rose 0.6 percent to $1,323.68 per ounce at 0435 GMT. Last week, the precious metal fell 1.2 percent for a second consecutive weekly decline.

U.S. gold futures for April delivery rose 0.8 percent to $1,326.30 per ounce.

“Gold has picked up a little in the last 24 hours, as a hint of dollar weakness creeps back into markets,” said Jordan Eliseo, chief economist at gold trader ABC Bullion.

The dollar index, a measure of the greenback against a basket of six major currencies, fell 0.34 percent to 90.137. Last week the index rose 1.4 percent because of a flight to safer assets amid a rout in global equity markets.

A weaker greenback makes dollar-denominated gold less expensive for holders of other currencies.

U.S. consumer price data will be released on Wednesday that should give clearer signs on the pace of inflation and with it the frequency of the anticipated interest rate rises. Concerns of rising inflation triggered the global equity drop last week.

“After last week’s sell off in risk assets, we expect gold to be well supported, especially if volatility in financial markets persists,” Eliseo said.

Last week, the benchmark S&P 500 fell 5.2 percent, its biggest decline since January 2016.