Jan 9 (Reuters) - Gold prices advanced to an eight-month high on Monday, as a weaker dollar made greenback-priced bullion cheaper for overseas buyers while hopes of less-aggressive U.S. rate hikes also lifted sentiment.
Spot gold was up 0.7% at $1,878.55 per ounce, as of 0256 GMT, its highest level since May 9, 2022. U.S. gold futures also rose 0.7% to $1,883.20.
The dollar index slipped 0.3%.
"Softer U.S. data on Friday boosted gold's appeal. Data suggests that Fed's cumulative tightening in 2022 is starting to have its effects felt on the economy and that the Fed can afford to slow its pace of tightening," said OCBC FX strategist Christopher Wong.
Data showed on Friday that the U.S. economy added jobs at a solid clip in December, but Fed officials could draw some solace from a moderation in wage gains. Also, U.S. services industry activity contracted in December for the first time in more than 2-1/2 years amid weakening demand, offering more evidence that inflation was abating.
Higher interest rates dim gold's allure as an inflation hedge and raise the opportunity cost of holding the non-yielding asset.
Market participants will now turn to Fed Chair Jerome Powell's speech at a central bank conference in Stockholm on Tuesday and U.S. consumer price index data due on Thursday.
"This week's CPI data would be key. Another deceleration in price pressures could boost appetite for gold while the dollar stays under pressure. However, an unexpected uptick in CPI may un-nerve sentiments," Wong added.
Traders also kept a tab on top bullion consumer China reopening borders that have been all but shut since the start of the COVID-19 pandemic.Spot silver gained 0.9% to $24.03, while platinum rose 0.5% to $1,095.58 while palladium was up 0.7% to $1,817.59.
(Source : Reuters) , all rights reserved by original source.
