The price of %Gold is rising and on track for its best week in more than a month as weak U.S. employment data revives hopes that the U.S. Federal Reserve will cut interest rates this year.
Spot gold’s price is up 1.35% on May 10 and trading at $2,371.40 U.S. per ounce, its highest level since early April. In the last five trading days, gold’s price has risen more than 3%.
Gold’s price has rallied following data that showed the number of Americans filing claims for unemployment benefits increased more than expected, a sign that the U.S. economy is slowing.
Investors are now looking ahead to the U.S. April inflation report due next week for clues as to where interest rates are headed this year.
Futures traders are pricing in a 68% chance of a rate cut in September of this year. Lower interest rates reduce the opportunity cost of holding non-yielding gold and benefit its price.
At the same time, Israeli forces have begun shelling the city of Rafah in the Gaza Strip after announcing the end of ceasefire talks with Hamas.
Rising tensions in the Middle East often lead to increased buying of gold, which is viewed as a safe haven asset.
Separately, spot silver’s price is up 0.8% to $28.56 U.S. an ounce on May 10, having also risen over the past week.