Precious metals were edging higher in value during the Monday trading session in advance of the world's largest economy releasing economic data this week and convening a policy meeting later this month, according to Bloomberg.
After having dropped nearly 4 percent last month, gold futures pushed higher as much as 0.3 percent as the trade week kicked off. The U.S. is slated to release data about retail sales later this week. The U.S. Federal Reserve is scheduled to meet next Tuesday and Wednesday.
During each of the four occasions that policy makers with the Fed have convened meetings thus far this year, the body has opted to taper monthly asset purchases. Fed chief Janet Yellen said earlier this year that the body is aiming to close the stimulus program by the end of the this year.
"Prices are underpinned near solid support at $1,240," states a Monday report authored by analyst Andrey Kryuchenkov with VTB Capital in London, according to Bloomberg. "The Fed will continue to taper quantitative easing, while a potentially stronger dollar will still provide a major hurdle to bullion's upside."
Stimulus cuts benefit gold
Each of the four cuts issued by the Fed thus far this year amounted to $10 billion. That reduction decreases the amount of dollars in the market and since the dollar and bullion typically perform the inverse of one another, gold benefits from the Fed reducing monetary stimulus measures.
Prior to the Fed cutting stimulus measures during the first month of this year, gold futures dropped 28 percent last year. That marked the first year of annual losses for gold since 2000.
U.S. jobs data could tug down gold
Reuters reports the yellowish metal is prone to losses during the Monday trade session due to a stronger-than-expected jobs report issued by the U.S. Department of Labor last week. That too indicates that the world's largest economy is growing stronger.
The labor market data released on Friday indicated employment levels in the U.S. pushed back to levels prior to the recession. Hiring has strengthened after a severe winter chilled much of the U.S.
One analyst lined the slight gains of the precious metal to action taken by the European Central Bank.
"We are above the $1,250 level based on last week's news dataflow. Clearly, the ECB easing for the moment is seen as positive," analyst Robin Bhar with Societe Generale told the news source on Monday. "I would still want to sell rallies because this rally was based on short-covering and not fresh buying."
Data slated for release this week
With minimal economic data slated for release on Monday, gold futures were edging higher in value, according to MarketWatch.
But as the week continues, additional data is slated for release. Data about wholesale inventories is set for release on Tuesday, May retail sales are scheduled to be distributed on Thursday and an index about producer prices is scheduled for release to close the week.
Also slated for release on Friday is consumer sentiment data to be distributed by the University of Michigan.
"Gold is threading water and appears to be biding time prior to the economic data later this week," states a Monday email authored by director Mark O'Byrne with GoldCore in Dublin, according to MarketWatch. "After the positive [U.S.] jobs report last week, there is an expectation that retail sales may rise. A positive retail sales number could see gold come under pressure. A worse-than-expected number should lead to a safe haven bid for gold."
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