Washington, Feb. 1 (BNA): Gold prices were on track for their third consecutive monthly gain, supported by overall dollar weakness and expectations about a rate hike from the US Federal Reserve.
Spot gold was near session highs, up 0.3% at $1,928.81 an ounce by 1:40 PM ET (1840 GMT). Bullion gained 5.7% in January, Reuters reports.
US gold futures rose 0.3% to $1,945.3.
The dollar was heading for its fourth consecutive monthly loss, making bullion more attractive to holders of other currencies.
“We’ve got a lot of event-driven risk throughout this week, and investors should pay attention to that. Gold prices are likely to be volatile,” said Philip Stripel, senior market analyst at Blue Line Futures in Chicago.
The US central bank’s policy decision is due at 1900 GMT on Wednesday, followed by a press conference by Federal Reserve Chairman Jerome Powell.
Traders priced in the Fed’s 25 basis point rate hike into a range of 4.5% – 4.75%. They expect rates to peak at 4.9% in June.
In addition, the European Central Bank and Bank of England are expected to raise interest rates by 50 basis points on Thursday.
Lower rates tend to be beneficial to bullion, which reduces the opportunity cost of holding non-yielding assets.
Meanwhile, analysts and traders raised their expectations for gold prices, but they expect higher rates to curb the price hike, a Reuters poll showed.
“Given how markets expect the FOMC, Bank of England and ECB to act, the focus is likely to be on what they say rather than the actions they take,” Lukman Otunuga, senior research analyst at FXTM, said in a note.
Markets are also awaiting the US jobs report for January on Friday, as weakness in the labor market led to lower inflation.
Spot silver rose 0.6% to $23.72 an ounce while platinum rose 0.3% to $1012.25 – yet both were on course for their first monthly decline in five.
Palladium rose 0.5% to $1,647.18, down for the second month in a row.