As the U.S. and Chinese markets were closed on Monday due to local public holidays, and some traders booked profits following the 2.5% spike in the previous session, gold prices fell on Monday due to low trading volumes.
By 0359 GMT, spot gold had dropped 1.1% to $4,988.04 per ounce. At $5,006.60 an ounce, U.S. gold futures for April delivery fell 0.8%.
Tim Waterer, head analyst at KCM, stated that “a lack of new positive triggers and thinner trading conditions have caused gold to give back some of Friday’s post-CPI gains today.” Waterer also suggested that profit-taking was taking place during the day. While Chinese markets are closed for the Lunar New Year vacation, U.S. markets are closed for the Presidents’ Day holiday.
Following an unrevised 0.3% gain in December, the Consumer Price Index increased by 0.2% in January, the Labor Department’s Bureau of Labor Statistics reported on Friday. Reuters polled economists, who predicted a 0.3% increase in the CPI.
Although he acknowledged that services inflation was still high, Federal Reserve Bank of Chicago President Austan Goolsbee stated on Friday that interest rates may decline.
At its upcoming meeting on March 18, market participants expect the central bank to keep interest rates. According to data gathered by LSEG, they are pricing in rate cuts of 75 basis points this year, with the first anticipated in July.
Bullion that does not yield often performs well when interest rates are low. According to Waterer, “for gold to push in the direction of $6,000 before year end, it will probably need the dollar to resume its downturn.”
According to two U.S. officials who spoke to Reuters, the U.S. military is getting ready for a weeks-long operation against Iran in the event that President Donald Trump approves an assault. This could escalate the confrontation to a level considerably higher than ever before between the two nations.
After rising 3% on Friday, spot silver dropped as much as 3.2% to $74.50 an ounce. Palladium dropped 0.2% to $1,682.44, while spot platinum fell 0.4% to $2,054.78 per ounce.
