Gold price holds bullish line: Inflation and U.S. dollar are key

Gold last traded at $1,899 an ounce. Silver at $27.93 an ounce.

NEWS SUMMARY: Precious metal prices steadied Monday ahead of fresh inflation data. U.S. stocks traded flat amid optimism about the economy's ongoing reopening this summer.

KITCO--"Gold saw a lot of volatility last week - first falling more than $40 and then climbing back up towards the $1,900 an ounce level. And the bull trend is far from over, according to analysts....

On Friday gold received a boost from May's disappointing U.S. employment report. Nonfarm payrolls increased only 559,000 in May, which is below the 671,000 estimate.

'The weaker economic data are better for gold. Many thought the employment report would beat expectations as the ADP data did on Thursday,' TD Securities head of global strategy Bart Melek told Kitco News. 'If employment continues to be lousy, the Fed wouldn't see inflation as an issue. And yields are not likely to react either, which is good for gold.'

Also, the employment report revealed that the labor participation rate continues to be low, which is a red flag. 'This means the Fed will continue to accommodate as long as it needs to in order to get the participation rate higher,' Melek noted.

Overall, May's bullish gold trend is still intact, said RJO Futures senior commodities broker Bob Haberkorn.

'The uptrend will continue based on this morning's employment data. Gold will try to get back to its August highs. I see gold trading back up to $1,920 into early next week,' Haberkorn said....Investors should keep a close eye on the U.S. Treasury yields and any new inflation headlines, with markets gearing up for the June 16 Fed's monetary policy meeting."