Gold prices hovered near a two-month high on Monday as weaker U.S. economic data last week solidified expectations for a June rate cut by the Federal Reserve.
Marex analyst Edward Meir said that gold prices rose last Friday because a series of macro data released by the United States led the market to believe that the Federal Reserve may cut interest rates earlier than expected. Gold prices rose by about $50 last week, and according to the Fed's preferred inflation indicator, the gains in the past two trading days came absolutely entirely from weak data on US manufacturing and construction spending, as well as the background of easing inflationary pressures.
Meir said the rally could also be due to short covering, as such a large gain in a short period of time suggests some shorts may have been caught off guard.
