Gold (XAU/USD) continued its rally for the second consecutive trading session on Monday (December 1), rising more than 0.40% as currency markets anticipate a Federal Reserve (Fed) interest rate cut next week.
Meanwhile, a weaker US dollar kept the yellow metal hovering around $4,240 at the time of writing, having reached a five-week high of $4,264.
Gold bullion remains strong despite the risk of BoJ tightening and weakening physical demand in China.
The yellow metal remains bullish, but central bank tightening, particularly from the Bank of Japan (BoJ) following comments by Governor Kazuo Ueda, and a split in the Federal Open Market Committee (FOMC) pose major risks to bullion prices.
Nevertheless, gold rallied more than 3.75% last week and appears poised to challenge the $4,300 level by year-end. In terms of data, the Institute for Supply Management (ISM) revealed that manufacturing activity contracted for the ninth consecutive month in November.
Further data released by the ISM showed that input prices rose and the labor market remained in a low state of layoffs and hiring.
Meanwhile, physical demand for gold in China has hampered buyers due to high prices, which has led to hundreds of store closures, according to the Financial Times.
Ahead of this week, US economic data will feature the ADP Employment Change, the ISM Services PMI, Initial Jobless Claims, and the release of the Fed's preferred inflation gauge, Core PCE. (alg)
Source: FXstreet
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