BENGALURU: Gold prices fell on Monday, weighed down by low liquidity as key markets in the US and Asia were shut for holidays, while a firm dollar added further pressure on bullion. Spot gold fell 0.7percent to USD5,007.70 per ounce by 0858 GMT, after losing more than 1percent earlier in the session.
US gold futures for April delivery lost 0.4percent to USD5,027.90 per ounce. “Gold is range-trading around USD5,000/oz in a week with lower liquidity due to holidays,” said UBS analyst Giovanni Staunovo. US markets were closed for Presidents’ Day, while markets in China and several other countries in Asia were closed for the Lunar New Year. The US dollar edged up, making greenback-priced bullion more expensive for holders of other currencies.
Recent US economic data painted a mixed picture for Federal Reserve interest rate cuts, as US consumer prices increased less than expected in January, while job growth unexpectedly accelerated in the same month.
Federal Reserve Bank of Chicago President Austan Goolsbee said on Friday that interest rates could go down, but noted that services inflation remained high. Market participants anticipate the central bank will keep rates steady at its next meeting on March 18. Non-yielding bullion tends to do well in low-interest-rate environments. On the geopolitical front, Iran is pursuing a nuclear agreement with the US that delivers economic benefits for both sides, an Iranian diplomat was reported as saying on Sunday.
“I’d pull back my medium-term target for gold from USD5,500 to closer to the USD5,100-USD5,200 range for now, but this is a very fluid situation,” said Zain Vawda, analyst at MarketPulse by OANDA. Meanwhile, spot silver lost 0.4percent to USD77.09 per ounce after a 3percent drop earlier in the session. The metal had risen 3.4percent on Friday.
“As a more cyclically sensitive metal, any sign of a strong economy reduces (silver’s) safe-haven appeal relative to gold, and the strong jobs data suggests less immediate need for haven assets,” Vawda added. Spot platinum slipped 0.9percent to USD2,043.60 per ounce, while palladium shed 0.3percent at USD1,681.34.
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