Investing.com– Gold prices edged lower in Asian trading on Monday, pressured by a stronger dollar, as expectations of a slowing pace of monetary easing kept traders largely tilted toward the greenback.
The yellow metal has continued to lose ground since late December, after the Federal Reserve warned it would cut interest rates at a slower pace in 2025. The dollar’s recent rebound is largely due to part with this idea.
Upbeat comments from some Fed officials over the weekend also put pressure on gold.
The was down 0.1% at $2,635.81 an ounce, while the February expiry was down 0.3% at $2,646.51 an ounce at 00:12 ET (05:12 GMT).
Fed Bullish Speech Sends Gold Down, But Boosts the Dollar
Gold’s losses and strength came after two Fed officials warned that the bank’s fight against inflation was not over, potentially heralding a more hawkish outlook for interest rates.
The greenback stabilized in Asian trade after reaching its highest level since November 2022.
Governor Adriana Kugler and San Francisco Fed President Mary Daly both said the central bank was not yet declaring victory over inflation and was closely monitoring the labor market for any signs of weakness .
Persistent inflation and a strong labor market give the Fed less impetus to cut interest rates. Focus this week turns to upcoming nonfarm payrolls data for more clues on interest rates.
Other precious metals also fell on Monday. Gold fell 0.4% to $942.0 an ounce, while gold fell slightly to $30.055 an ounce.
Among industrial metals, prices fell 0.3% to $4.0655 a pound. The red metal has been pressured by uncertainty over further stimulus measures in China, with attention turning to upcoming inflation data this week for more clues about the world’s largest copper importer.
Goldman Sachs (NYSE:) advances its forecast for a gold price of $3,000
Goldman Sachs said on Monday it now expects the price of gold to hit $3,000 an ounce by mid-2026, after the yellow metal missed the target price set for the end of 2024.
The investment bank expects gold to end 2025 at around $2,900 an ounce and hit $3,000 later as interest rate cuts slow the Fed.
The price of gold gained about 27% in 2024 as it benefited from the Fed’s 1% interest rate cut in the second half of the year.
The yellow metal also benefited from strong safe-haven demand amid heightened geopolitical tensions in the Middle East and Russia.
But gold lost ground toward the end of the year, pressured by the Fed’s more optimistic outlook for 2025.
