Gold slips as dollar firms; market eyes crucial US data

An employee takes granules of 99.99 percent pure gold at the Krastsvetmet non-ferrous metals plant, one of the world’s largest producers in the precious metals industry, in the Siberian city of Krasnoyarsk, Russia November 22, 2018. REUTERS/Ilya Naymushin/Files

Gold prices fell on Monday as the U.S. dollar held firm, while investors awaited U.S. economic data for fresh insights on the Federal Reserve’s monetary policy path.

Spot gold XAU= fell 0.5% to $2,733.01 per ounce, as of 0232 GMT.

U.S. gold futures GCv1 declined 0.3% to $2,745.5.

READ: Gold breaks above $2,700 to record high

The dollar index .DXY gained 0.2%, on track for its best month since April 2022. A stronger dollar makes gold less appealing for other currency holders.

“The U.S. dollar has continued its good run of form in the aftermath of the Japanese election, which has dented gold’s appeal,” said Tim Waterer, chief market analyst at KCM Trade.

But, “gold still looks in good shape to potentially make a push towards $2,800 and beyond but it will first have to navigate a batch of key macro data this week, which could have interest rate implications for the Fed.”

Data lined up for the week includes the U.S. employment report, job openings, and core Personal Consumption Expenditures (PCE) data, which are vital for assessing the labor market’s health and inflation trends.

Traders now see a nearly 95% chance of a quarter basis point cut by the Fed in November, according to CME’s FedWatch Tool. Lower rates raise the appeal of non-yielding bullion.

Gold hit a record high of $2,758.37 on Wednesday, driven by safe-haven demand due to geopolitical uncertainties.

Israeli Prime Minister Benjamin Netanyahu claimed airstrikes “hit hard” Iran’s defenses, while Iranian Supreme Leader Ali Khamenei said the damage should not be exaggerated.

Elsewhere, as the U.S. gears up for Election Day on Nov. 5, uncertainty prevails, with recent polls showing a tight contest between Donald Trump and Kamala Harris.

Spot silver XAG= was down 0.9% to $33.39 per ounce and platinum XPT= edged 0.1 down to $1,022.20.

Palladium XPD= shed 0.3% to $1,189.27 after hitting a 10-month high in the previous session.