Gold prices fell on Monday as waning expectations for an early interest rate cut in the United States boosted the dollar and Treasury yields ahead of key inflation data later this week. By 05:56 GMT, spot gold dropped 0.7% to $2030.49 per ounce. U.S. gold futures also decreased by 0.6% to $2037.00 per ounce. Trading was light in Asia due to the Japanese market being closed for a holiday.
The dollar index rose 0.1% after posting its best week since July 2023 on Friday, making bullion more expensive for holders of other currencies, while the yield on the benchmark U.S. 10-year Treasury hit above 4%. Official data showed that U.S. businesses hired more workers than expected in December, but separate data from the Institute for Supply Management indicated that the services sector slowed significantly last month.
Investors expect about a 64% chance that the Federal Reserve will reduce interest rates in March, down from nearly 90% before the new year, according to the CME Group's FedWatch tool. Investors are now awaiting the U.S. Consumer Price Index data scheduled for release on Thursday to gauge the pace of potential interest rate cuts by the central bank.
For other precious metals, silver fell 0.8% to $22.97 per ounce in spot transactions, platinum decreased by 0.6% to $954.13, and palladium lost 1.3% to $1013.78, marking a tenth consecutive session of decline.
