Gold falls to near three-week low

Gold prices slid on Monday to trade near a three-week low touched in the last session, as the dollar and bond yields were buoyant on reduced hopes of an early rate cut by the US Federal Reserve and as markets await a key inflation print this week.

Spot gold slipped 0.9% at $2,027.87/oz as of 10.33am GMT, hovering near its lowest level since December 19 touched in the last session. US gold futures fell 0.7% to $2,034.40/oz.

“I’m expecting inflation data to be a central catalyst, and data above expectations can add pressure on gold as it can reduce the possibility that they are going to cut rates,” Kinesis Money market analyst Carlo Alberto De Casa said.

“In the first quarter of this year, unless inflation is significantly going down, it would be very difficult for central banks to cut rates in 2024.”

Ahead of the US consumer price inflation report on Thursday, the market expects a chance of about 69% for a Fed rate cut in March, according to the CME FedWatch tool.

The dollar index was up 0.1% after posting its best week since July 2023 on Friday, making bullion more costly for other currency holders, while benchmark US 10-year treasury yields remained above 4%.

“I think we’re seeing some follow-through from the strong jobs data. It’s all tied back to cooling off expectations for rate cuts this year,” financial market analyst Kyle Rodda said.

Official data showed that firms in the US employed more people than expected in December. Still, secondary data from the Institute for Supply Management (ISM) indicated that the services industry slowed significantly in December.

Spot silver was down 0.9% at $22.96/oz, and platinum fell 0.9% to $951.33. Palladium lost 1.7% to $1,009.71 on its tenth session of slide.