Gold hovers near two-month peak as bets build for June US rate cut

By Sherin Elizabeth Varghese(Reuters) – Gold prices were anchored near a two-month peak on Monday, following last week’s tepid U.S. economic data, which solidified bets for the Federal Reserve’s first interest rate cut of the year in June.

Spot gold was steady at $2,082.89 per ounce, as of 1230 GMT. U.S. gold futures fell 0.2% to $2,091.50.

Gold prices traded close to $2,088.19 an ounce, a level seen on Friday when the contract hit its highest level since Dec. 28. Bullion scaled a record peak of $2,135.40 in early December.

“Weaker-than-expected U.S. economic data last week pushed down U.S. real interest rates and this was the driver of the latest gold price rally,” said UBS analyst Giovanni Staunovo.

Gold prices surged by approximately $50 over the course of last week, momentum fueled by disappointing U.S. manufacturing and construction spending figures as well as a reduction in price pressures, as indicated by the Federal Reserve’s preferred inflation gauge.