Gold prices experienced a decline on Monday, stepping back from the five-month peak reached in the previous session. This drop came as robust U.S. Treasury yields dampened demand for the precious metal, just ahead of significant inflation and economic growth data scheduled for release later this week.
Spot gold decreased by 0.8%, falling to $1,965.89 per ounce as of 0104 GMT, while U.S. gold futures slipped by 0.9% to $1,977.10.
In the prior session, gold prices had reached their highest level since mid-May. Investors had been turning to gold as a safe haven amidst escalating Middle East conflicts, contributing to a second consecutive weekly gain.
The persistent selling of U.S. government bonds has propelled Treasury yields to their highest levels in over fifteen years. This surge in yields reduced the appeal of gold, which does not offer interest or yield.
This week, investors will be closely monitoring key economic indicators, including the U.S. PCE price index, the Federal Reserve’s preferred measure of inflation, U.S. GDP figures for the third quarter, the European Central Bank’s interest rate decision, and global flash PMIs.
Atlanta Fed President Raphael Bostic pointed out that while inflation remains elevated, there are signs of an economic slowdown. This situation might open the door to more accommodative monetary policy late next year.
China is focusing on fostering a sustained economic recovery by expanding domestic demand while addressing financial risks, as stated by People’s Bank of China Governor Pan Gongsheng.
The SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, reported a 1.8% increase in its holdings on Friday.
Data revealed that COMEX gold speculators switched to a net long position of 41,867 contracts in the week ending October 17, with an additional 56,655 contracts added.
In India, physical gold dealers had to offer more substantial discounts as domestic prices rose, slowing demand just ahead of a significant festival. Meanwhile, China, the largest consumer of gold, saw a slight drop in premiums.
Spot silver experienced a 1.2% decline to $23.07 per ounce, platinum slipped by 0.7% to $888.61, and palladium was down 0.1% to $1,096.58.
