Investing.com - Gold futures extended last week’s strong gains in European trade on Monday, hitting a fresh four-week high as investors looked ahead to the Federal Reserve’s policy meeting later this week and amid mounting jitters over the upcoming referendum on whether the U.K. would remain in the European Union.
The Fed is not expected to take action on interest rates at the conclusion of its two day policy meeting on Wednesday. The central bank will also release its latest forecasts for economic growth and interest rates.
Fed Chair Janet Yellen is to hold what will be a closely-watched press conference 30 minutes after the release of the Fed's statement, as investors look for any change in tone about the economy or future rate hikes.
Investors all but ruled out a rate hike in June after U.S. employment data earlier this month showed the economy added just 38,000 jobs last month, the smallest increase since September 2010.
Market players are pricing in just a 2% chance for a rate hike this week and 23% for July, according to CME Group's (NASDAQ:CME) FedWatch tool. September odds were at about 37%.
Meanwhile, growing concerns over whether the U.K. would remain in the European Union when a referendum on EU membership takes place on June 23 is also rattling markets and boosting demand for safe-haven assets.
Gold for August delivery on the Comex division of the New York Mercantile Exchange rallied to a daily peak of $1,287.10 a troy ounce, the most since May 16. It last traded at $1,285.20 by 06:55GMT, or 2:55AM ET, up $9.30, or 0.73%.
Gold notched a weekly gain of 2.7% last week, the second straight weekly rise.
Prices of the precious metal are up nearly 6% so far in June, after sliding more than 6% a month earlier, as market players reacted to shifting views on the timing of the next U.S. rate hike.
Gold is up 20% so far this year amid skepticism over the Federal Reserve's ability to raise interest rates as much as it would like this year.
The yellow metal is sensitive to moves in U.S. interest rates. A gradual path to higher rates is seen as less of a threat to gold prices than a swift series of increases.
Elsewhere on the Comex, silver futures for July delivery shed 7.5 cents, or 0.43%, to trade at $17.25 a troy ounce during morning hours in London, while copper futures inched up 2.1 cents, or 1.01%, to $2.051 a pound.
Investors digested another round of Chinese economic data. Industrial production rose at an annualized rate of 6.0% in May, beating expectations for a 5.9% increase and holding steady from a gain of 6.8% in the preceding month, the General Administration of Customs said on Monday.
Fixed asset investment, which tracks construction activity, rose 9.6% last month, below forecasts for an increase of 10.5%.
The Asian nation is the world’s largest copper consumer, accounting for nearly 45% of world consumption.