Gold prices eased on Monday from a three-week high hit earlier in the session as investors booked profits and traders adjusted their expectations for Federal Reserve rate cuts, awaiting further data to assess the interest rate outlook. Spot gold fell 0.6% to $2,695.79 per ounce as of 0246 GMT.
US gold futures shed 0.5% to $2,697.90. Gold is being pressured as “some traders wanted to book a profit around the $2,718 high, given gold futures enjoyed their best week since the pandemic last week,” said Matt Simpson, senior analyst at City Index.
“I doubt we’ll simply see a continuation of last week’s surge given the shorter trading week due to US Thanksgiving.”
Traders see a 51% chance of another 25-basis-point Fed rate cut in December, down from 62% last week, according to the CME Fedwatch tool. Higher interest rates, which make non-yielding assets like gold less appealing, could further pressure the metal.
Some Fed policymakers last week expressed concern that inflation progress may have stalled, advocating for caution, while others emphasized the need for continued rate cuts.
Less dovish US policy signals and potential inflation surprises could support a December rate hold, slowing rate cut prospects can be seen weighing on gold prices, said IG market strategist Yeap Jun Rong.
Investors are watching out for the Fed’s November FOMC meeting minutes, GDP data (first revision), and core PCE figures, this week.
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Meanwhile, limiting further downside, the dollar index dipped 0.7%, boosting gold’s appeal for holders of other currencies.
The benchmark 10-year Treasury yields also declined.
On the physical front, gold premiums in India dipped last week as rising local prices cooled demand, while bullion interest in China and other Asian markets stayed muted.
Spot silver fell 1% to $30.99 per ounce, platinum was down 0.3% to $960.85 and palladium slipped 0.6% to $1,003.21.
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