Gold prices fell on Monday due to the strength of the U.S. dollar, as investors await economic data and comments from Federal Reserve officials for clarity on the timing of rate cuts.
Spot gold was down 0.5% at $2,321.49 an ounce, by 0852 GMT, after rising 1% on Friday. U.S. gold futures fell 0.6% to $2,334.40.
U.S. 10-year Treasury yields and the dollar rose during the day, making bullion less attractive.
“Gold bulls are maintaining their expectations for U.S. interest rate cuts after more hawkish remarks from the Fed over the weekend,” said Han Tan, chief market analyst at Exinity Group.
Minneapolis Fed President Neel Kashkari said Sunday it was “reasonable to anticipate” the U.S. central bank would cut interest rates once this year, until December.
Several Fed policymakers are scheduled to speak this week. The main data are US retail sales on Tuesday, weekly jobless claims on Thursday and rapid purchasing managers’ indexes on Friday.
Data released last week showed that the labor market and price pressures were showing signs of slowing.
“With some signs of weakness emerging in the US economy, which could weaken the US dollar and increase expectations for rate cuts in the future, gold is in an excellent position to benefit,” said Kyle Rodda, financial markets analyst at Capital.com.
Lower interest rates make gold, which yields no returns, a more attractive investment choice.
“The precious metal remains supported by lingering hopes for a shift in monetary policy from the Fed. Political turmoil in France has also added to the cacophony of down-risk triggers on the global stage,” Mr. Tan from Exinity Group.
Elsewhere, China’s industrial production in May missed forecasts due to the collapse of the property market, high local government debt and deflation.
Spot silver fell 1.2% to $29.19 an ounce, platinum fell 0.6% to $951.60 and palladium gained 0.5% to $894.50. (Reporting by Ashitha Shivaprasad in Bengaluru; Editing by Sonia Cheema)
