Gold prices declined on Monday amid a rising dollar, as investors awaited several important central bank meetings and U.S. inflation data this week for more clues about the direction of interest rates. Spot gold fell 0.3% to $1997.16 per ounce by 05:14 GMT, while U.S. gold futures dropped 0.1% to $2013.20. Tim Waterer, senior market analyst at KCM Trade, stated, "Strong job figures on Friday reshaped expectations for the Federal Reserve next year, providing some relief for the dollar and bond yields, putting downward pressure on gold." The dollar rose 0.1% against competing currencies, increasing the cost of gold for holders of other currencies.
Data showed that non-farm jobs in the U.S. increased by 199,000 last month, exceeding economists' expectations of 180,000 jobs. The report led traders to reduce expectations that the Federal Reserve might cut interest rates in March. Traders will closely monitor the U.S. Consumer Price Index report for November for more evidence regarding interest rates ahead of the Federal Reserve’s statement and comments from its Chair Jerome Powell on Wednesday. The Federal Reserve is widely expected to keep interest rates unchanged in the range of 5.25% to 5.50% this week. Additionally, the European Central Bank, Bank of England, Norwegian Bank, and Swiss National Bank will hold their monetary policy meetings on Thursday.
Goldman Sachs expects the Federal Reserve to cut interest rates for the first time in the third quarter of next year, earlier than its previous forecast for the last quarter, citing improved inflation data. Lower interest rates would support gold, which does not yield returns.
Regarding other precious metals, silver declined 0.1% in spot transactions to $22.94 per ounce, while platinum held steady at $914.27, and palladium fell 0.9% to $938.68 per ounce.
