On Monday, gold prices experienced a slight decline, influenced by a weakened dollar that provided some support to prices. Investors were in anticipation of the release of minutes from the Federal Reserve’s recent meeting, seeking 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, reaching $1,977.49 per ounce, following a peak at $1,993.29 on the previous Friday. Meanwhile, U.S. gold futures settled 0.2% lower at $1,980.30.
Bart Melek, Head of Commodity Strategies at TD Securities, noted, “Technically, we’ve seen gold hit resistance and is back to range-bound trading with somewhat higher rates as a catalyst here.” He anticipated that the Federal Reserve would maintain its narrative, emphasizing that monetary policy would be contingent on inflation, and interest rates would be kept elevated as long as necessary.
The eagerly awaited minutes of the Federal Reserve meeting were scheduled for release on Tuesday. Last week’s data renewed optimism that the Fed might initiate monetary easing sooner than anticipated, prompted by a slowing job market and a consumer inflation report below expectations.
The prospect of lower interest rates, which typically exerts downward pressure on the dollar and bond yields, enhances the appeal of non-yielding assets like gold.
In a note, analysts at Kitco Metals observed that precious metals bulls were in need of fresh, fundamental impetus as they had lost momentum. Rising U.S. Treasury yields were prevailing over a lower U.S. dollar and increased crude oil prices, making gold and silver buyers cautious.
Despite the decline in the dollar, which slipped 0.5% to a more than 2-1/2-month low against a basket of rivals, gold’s losses were limited.
The world’s largest gold-backed exchange-traded fund, SPDR Gold Trust, saw its holdings rise by 1.5% on Friday.
In other precious metals, spot silver recorded a 1.3% increase, reaching $23.43 per ounce. Platinum experienced a 2.2% jump to $918.95, while palladium gained 2.4% to $1,077.83 per ounce, both touching their highest levels in about two weeks.