Spot gold was 0.4% lower to $2,037.39 per ounce, and U.S. gold futures dropped 0.3% to $2,043.60 per ounce
Gold prices dropped on Monday as fading expectations of an early rate cut in the U.S. kept the dollar and bond yields supported, ahead of a key inflation data due later this week.
Spot gold was 0.4% lower to $2,037.39 per ounce, as of 0342 GMT. U.S. gold futures dropped 0.3% to $2,043.60 per ounce.
Trading was thin in Asia, with the Japanese market shut for a holiday.
I think we are seeing some follow through from the strong jobs data. It is all tied back to cooling off of expectations for rate cuts this year, said Kyle Rodda, a financial market analyst at Capital.com.
The dollar index was 0.1% higher, after marking its best week since July 2023 on Friday, making bullion more expensive for holders of other currencies, while benchmark U.S. 10-year Treasury yields, held above 4%.
U.S. employers hired more workers than expected in December, official data showed, but separate data from the ISM suggested that the services sector slowed considerably last month.
Market participants are pricing in an around 64% chance of a rate cut by the Fed in March, down from an around 90% probability seen before the New Year, as per the CME FedWatch tool.
However, things still look constructive in the near term, but the retracement in gold prices might have a little bit more left into it, said Rodda.
Investors now wait for Thursday’s U.S. consumer price inflation report for further direction on the Federal Reserve’s pace and scale of rate cuts.
Spot silver was 0.6% lower at $23.01 per ounce, and platinum declined 0.6% to $954.77. Palladium shed 0.7% to $1,020.25, its tenth session of decline.
