On Monday, gold prices experienced a marginal decline, underpinned by a weaker dollar, as investors eagerly awaited the release of the minutes from the Federal Reserve’s recent meeting for insights into the central bank’s stance on interest rates.
At 3:33 p.m. ET (2033 GMT), spot gold showed a 0.1% decrease, settling at $1,977.49 per ounce, following a peak of $1,993.29 reached on Friday. Simultaneously, U.S. gold futures registered a 0.2% dip, closing at $1,980.30.
Bart Melek, Head of Commodity Strategies at TD Securities, noted that gold encountered resistance from a technical standpoint, leading to a return to range-bound trading, spurred in part by slightly higher rates. He anticipates the Federal Reserve to maintain its narrative, emphasizing that monetary policy will hinge on inflation and that elevated rates will persist as necessary. The release of the Fed meeting minutes is slated for Tuesday.
Last week’s economic data rekindled optimism that the Federal Reserve might initiate monetary easing sooner than anticipated. This followed a slowdown in the job market and a consumer inflation report falling below expectations.
The appeal of non-yielding bullion tends to increase when interest rates decrease, influencing downward pressure on the dollar and bond yields. Kitco Metals analysts noted that precious metals bulls are currently lacking momentum and require fresh, fundamental impetus.
Despite a lower U.S. dollar, driven by a 0.5% slip against a basket of rivals to a more than 2-1/2-month low, gold’s losses were restrained. The dollar’s decline was instrumental in limiting gold’s downturn, given its impact on enhancing the attractiveness of the precious metal.
Meanwhile, the world’s largest gold-backed exchange-traded fund, SPDR Gold Trust, witnessed a 1.5% increase in holdings on Friday.
In the broader precious metals market, spot silver experienced a 1.3% rise to $23.43 per ounce. Platinum surged by 2.2% to $918.95, and palladium saw a 2.4% gain, reaching $1,077.83 per ounce, both touching their highest points in approximately two weeks.
