There’s been “a big momentum shift” on gold, said Chris Weston, head of research at Pepperstone Group Ltd. However, US labor data later this week could pose an element of downside risk to bullion, with bets on lower real rates into next year looking very aggressive, he said.
Gold rose 0.7% to $2,086.67 an ounce as of 10:31 a.m. in Singapore, following a 1.8% increase on Friday. Bullion’s 14-day relative strength index is now well above the threshold suggesting it may have been overbought. The Bloomberg Dollar Spot Index was steady, while silver, platinum and palladium all edged lower.
Bullion has surged around 15% from a low in early October. It benefited from a spate of haven buying following the Hamas attack on Israel, and then, in recent weeks, the rally got extra impetus from the growing expectations for US rate cuts. It’s been bolstered by a drop of 60 basis points in the US 10-year Treasury yield and a decline of almost 3% in a gauge of the dollar over November.