Investing.com – Gold prices traded slightly above breakeven on Monday, bouncing off session lows after the dollar came under pressure following comments from a top Federal Reserve official.
Gold futures for December delivery on the Comex division of the New York Mercantile Exchange rose $0.80, or 0.06%, to $1,265.40 a troy ounce.
Gold continued to pare losses, following a slump on Friday on the back of strong nonfarm payrolls data suggesting the U.S. economy could sustain further rate hikes while St. Louis Fed President James Bullard said that low interest rates are “likely to remain appropriate” over the near term.
"The current level of the policy rate is likely to remain appropriate over the near term," Bullard said in slides prepared ahead of a speech to the America's Cotton Marketing Cooperatives 2017 Conference in Nashville, Tennessee.
Gold is sensitive to moves in U.S. rates, which lift the opportunity cost of holding non-yielding assets such as bullion.
Inflation data later in the week, however, are expected to provide the yellow metal with fresh direction, as market participants are keen to establish whether the slowdown in inflation has continued unabated.
The slowdown in inflation, has weighed on the prospect of rate hikes later this year, pressuring both the dollar and bond yields while helping the yellow metal trade close to seven-week highs.
The producer price index and the consumer price index data are slated for Thursday and Friday respectively.
A slump in trading volumes due to the holidays (in Asia), however, is expected to keep gold prices range bound.
"We think gold is going to trade in a very tight range because of the low level of liquidity in the market due to the holidays (in Asia)," said Richard Xu, a fund manager at China's biggest gold exchange-traded fund HuaAn Gold.
Silver futures fell 0.10% to $16.235 while platinum futures rose by 0.26% to $971.55.
Copper traded at $2.909, up 0.83%, while natural gas, tacked on 0.87% to $2.798.