Gold Holds above $5,020

By Praisebell Rosemond Larbi

Gold prices extended gains in Monday’s trading session, climbing more than one percent to trade above $5,020 per ounce, the strongest level in over a week, as a softer U.S. dollar and rising expectations of interest-rate cuts continued to underpin demand.

The rally comes amid growing market conviction that the U.S. Federal Reserve may begin easing monetary policy later this year if labour market conditions show further signs of cooling. A weaker dollar has made gold more attractive to non-U.S. investors, reinforcing its appeal as both a hedge and a store of value.

Over the past month, gold prices have risen 8.81 percent, while year-on-year gains stand at an impressive 71.50 percent, based on trading in contracts for difference (CFDs) that track benchmark gold prices. The performance highlights sustained investor interest in the metal against a backdrop of macroeconomic uncertainty, shifting monetary policy expectations, and heightened geopolitical risks.

Market attention is now firmly focused on a series of key U.S. economic releases scheduled for later this week. The January jobs report, due on Wednesday, is expected to offer fresh insight into the strength of the U.S. labour market, while inflation data set for Friday will be critical in shaping expectations around the Fed’s interest-rate trajectory.

Sentiment in bullion markets has also been supported by recent remarks from San Francisco Federal Reserve President Mary Daly, who suggested that one or two rate cuts may be warranted should labour market conditions soften further. Such signals have reinforced investor positioning in non-yielding assets such as gold.

On the demand side, central bank buying continues to provide a strong structural tailwind. China’s central bank extended its gold purchases for a 15th consecutive month in January, underscoring ongoing reserve diversification efforts and long-term institutional demand for the metal.

Geopolitical developments remain an additional support factor. Investors are closely monitoring ongoing diplomatic engagements between the United States and Iran, with both sides agreeing to continue discussions this week in an effort to ease tensions. Persistent geopolitical uncertainty has helped sustain safe-haven demand for gold.

Looking ahead, bullion markets are likely to remain highly sensitive to incoming macroeconomic data, currency movements, and central bank communication. Near-term price direction will largely depend on whether U.S. labour and inflation data reinforce expectations of monetary easing or trigger renewed volatility across global commodity markets.