After the U.S's mixed economic data undermined expectations that interest rates will be hiked ahead of the Federal Reserve's meeting this week, gold has risen from the lowest level that it has seen over the past five weeks.
Since metal declined in February and March, it has not significantly changed with investors monitoring the data to estimate when the Federal Reserve will launch an interest rate hike. After mixed data about the orders in the housing market and business investments was released, the Federal Reserve is scheduled to start its two-day meeting on April 28. While investors have increased their gold stocks two weeks in a row, this week Greece will seek ways of paying pensions and salaries to public employees.
Frederic Panizzutti, the global sales manager at MKS Switzerland PAMP Group in Dubai, said that the Federal Reserve's meeting will be a "critical" one, adding "Everyone was expecting an interest rate hike this summer, however, with the latest data, this possibility has dropped."
After spot gold hit $1,183.83 per ounce, marking an increase of 0.4 percent, it rose to $1,182.94 at 11.12 a.m. GMT. With Friday's $1,175.35, the price of spot gold has dropped to its lowest level since March 20.
Although the Federal Reserve announced that it will not launch an interest rate hike in April's meeting, policy makers estimate that it could be launched in June's session. High interest rates direct investors to assets, which are expected to yield better profits, by undermining the attraction of gold, which generally return profits to its investors merely by means of price increase.
In the U.S., orders for non-defense durable consumer goods, with the exception of planes, unexpectedly dropped by 0.5 percent in March, continuing to decline for the seventh month. Meanwhile, orders for all consumer durables, including planes and automobiles, surged by 4 percent. Other data that was released last week showed that second-hand house sales have made a leap in March, while first-hand house sales declined more than expected.
According to the data compiled by Bloomberg, gold stocks in the Gold Backed Exchange Traded Funds (ETFs) continued to rise on Friday as well, taking its surge to the sixth day. Thus, gold stocks have achieved the longest-term rise since Jan. 29, and increased by 5.1 tons in April.
After spot silver hit $15,890 per ounce with an increase of 1 percent, it fell to $15,834. Meanwhile, palladium dropped to $770.75 per ounce with a decline of 0.2 percent, and platinum did not considerably change but remained at $1,123.50.