Ella 
Gold prices resumed their upward move and remain near one-month tops.
Gold/dollar was supported by expectations that the Fed would end its rate hike cycle.
A positive risk tone could prevent bulls from taking aggressive positions and limit further gains.
Gold prices in Asia on Monday attracted new bulls and rose steadily above $1,945. Gold/dollar remains close to the one-month high of $1952-$1953 touched on Friday, and is expected to extend the recent strong rebound from the more than five-month low of $1885 (August).
A mixed U.S. jobs report on Friday ensured that the Fed will hold pat at its September meeting. That boosted non-yielding gold. In fact, the overall non-agricultural population showed an increase of 187,000 in August, which was higher than market expectations. However, the previous reading was revised to 157,000 from 187,000. In addition, the unemployment rate climbed to 3.8% from 3.5% in July, and the annual growth rate of average hourly earnings fell to 4.3% from 4.4%. Data pointed to a slight deterioration in the labor market, limiting the Fed’s room to continue raising interest rates.
The outlook failed to help the dollar capitalize on its strong gains over the past two sessions and was another factor supporting gold prices. A weaker dollar generally benefits demand for dollar-denominated commodities, including XAU/USD. However, gold’s decline remains limited as the market is still pricing in the possibility of the Federal Reserve raising interest rates by 25 basis points by the end of the year. This still supports high U.S. bond yields and continues to benefit the dollar. Additionally, overall gains in stocks could limit gains in safe-haven gold.
Expectations that the Federal Reserve is nearing the end of its interest rate hike cycle, coupled with optimism that China will expand stimulus to boost economic growth, continue to boost investor confidence. Indeed, China’s top economic planning body – the National Development and Reform Commission (NDRC) – said on Monday that it would create a designated department to support China’s ailing private economy. This comes after China last week increased local currency liquidity and relaxed some mortgage rules. In the absence of any relevant market-moving economic data releases and a U.S. bank holiday, risk flows could prevent traders from making aggressive bullish bets around gold prices, at least for now.
