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Gold gains as focus shifts to US economic data

Gold rates inched higher on Monday, supported by a softer dollar, while investors waited for a slew of U.S. economic data consisting of the December nonfarm payrolls report for more guidance on the Federal Reserve's interest rate position.

Area gold increased 0.2% to $2,643.69 per ounce by 0229 GMT. U.S. gold futures climbed up 0.1% to $2,656.80.

A controlled start to the week by the U.S. dollar is assisting gold to eke out some gains, stated Tim Waterer, chief market analyst at KCM Trade.

How the U.S. tasks data fares this week could hold the key to whether gold breaks out of its recent range, he stated, including that: There is a wide variety of U.S. information due for release this week (including ISM Services PMI data), and any downside misses out on might hurt the USD and help gold.

The U.S. tasks report, due on Friday, is anticipated to supply more clues to the Fed's rate outlook after the U.S. reserve bank rattled markets last month by decreasing its projected cuts for 2025.

Investors are likewise waiting for ADP hiring and task openings information, in addition to minutes of the Fed's last policy conference, for further instructions.

Gold flourishes in a low-interest-rate environment and functions as a hedge versus geopolitical uncertainties and inflation.

U.S. President-elect Donald Trump is set to go back to office on Jan. 20 and his suggested tariffs and protectionist policies are expected to fuel inflation.

This could trigger the Fed to go sluggish on rate cuts, limiting gold's upside. After three rate cuts in 2024, the Fed has predicted just two reductions for 2025 due to relentless inflation.

The U.S. reserve bank's benchmark policy rate need to remain limiting till it is more specific that inflation is returning to its 2% target, Richmond Federal Reserve President Thomas Barkin stated on Friday.

Spot silver acquired 0.2% to $29.67 per ounce, platinum shed 0.5% at $933.60, and palladium fell 0.9% to $920.09.

(source: Reuters)