Gold prices rose on hopes of stimulus measures worldwide
Gold futures edged higher on Monday, as hopes that central banks around the world would soon announce fresh stimulus measures to help spur weak global growth continued to support the precious metal. Preliminary data released earlier in the day showed that Japan's economy grew by a modest 0.3% in the April-to-June period, disappointing expectations for a 0.6% increase. On an annualized basis, the country's gross domestic product rose 1.4% in the second quarter, below forecasts for growth of 2.3% and slowing sharply from an upwardly revised 5.5% in the preceding quarter. The weakening global outlook fuelled speculation that policymakers around the world will take fresh steps to stimulate the global economy with monetary policy tools, which boosts gold's role as a currency alternative.
Gold prices also remained underpinned by ongoing speculation the Federal Reserve will introduce additional easing measures to boost U.S. economic growth. Market participants will be watching U.S. data on retail sales, inflation and housing during the upcoming week in an attempt to assess the strength of the U.S. economic recovery.