Gold prices rose off a two-month low on Monday, recouping about half of what they lost in the previous session, as investors wagered that stimulus from central banks will remain in place for the foreseeable future, bolstering the case for bullion, despite some strength in the U.S. stock market.

“The global economic recovery will still require further aid and gold prices should still be supported over the medium-term,” wrote Edward Moya, senior market analyst at brokerage Oanda, in a daily research note.

The moves higher for gold on Monday come after the commodity closed out Friday’s trade lower and notched a sharp weekly slide, following an unexpected rise in U.S. jobs for May and a drop in the nation’s unemployment rate to 13.3% from 14.7%, pushing prices for the haven metal to their lowest finish since April.

“Gold prices are shrugging off the last week’s decline on hopes the Fed will not tap the breaks in supporting the U.S. economic recovery,” Moya speculated.

August gold
GCQ20,
+1.31%

on Comex climbed $22.10, or 1.3%, to settle at $1,705.10 an ounce, after finishing last week’s trade at the lowest level since early April and notching a weekly decline of 3.9%, according to FactSet data based on the most-active contracts. On Friday, prices lost 2.6%.

Meanwhile, July silver
SIN20,
+2.40%

added 41 cents, or 2.4%, to end at $17.893 an ounce, settling Friday at its lowest level in two weeks to suffer a 5.5% weekly decline.

Meanwhile, U.S. benchmark stock indexes traded higher as gold futures settled, with investors eyeing the Federal Reserve, which was set to release an updated policy statement at the conclusion of its two-day meeting on Wednesday.

Read: Fed will be encouraged by the May job-market surprise but unlikely to rip up its low-rates-for-longer script

“Still bearish for the safe-haven metals is upbeat trader and investor risk appetite recently that has seen money flowing into equities markets,” said Jim Wyckoff, senior analyst Kitco.com, in a daily note.

However, “a shaky U.S. dollar on the foreign exchange market” is among the bullish “‘outside market’ forces working in favor of the metals market bulls to start the trading week,” he said. In Monday dealings, the ICE U.S. Dollar index
DXY,
-0.30%

were trading 0.3% lower, providing some support for dollar-denominated gold prices.

Elsewhere on Comex, July copper
HGN20,
+0.88%

tacked on 0.4% to settle at $2.5655 a pound, after logging a 5% weekly gain on Friday. July platinum
PLN20,
+3.84%

rose 3.7% at $861.20 an ounce, following a weekly loss of more than 5%, while September palladium
PAU20,
+4.02%

climbed 4.3% to $2,036.90 an ounce, following a weekly slump of around 1%.


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