Spot gold slid 0.1% to $2,617.15 per ounce after touching its lowest since October 10 on Monday
Gold hovered near a one-month low on Tuesday, as investors awaited a set of key U.S. economic data and comments from Fed officials for further clarity on the interest rate trajectory.
Spot gold slid 0.1% to $2,617.15 per ounce by 0436 GMT, after touching its lowest since October 10 on Monday. U.S. gold futures added 0.2% to $2,623.30.
The U.S. dollar held near a four-month high, as investors continued to pile into trades seen as benefiting from the incoming Donald Trump administration. A stronger dollar makes bullion less attractive for holders of other currency.
Gold has succumbed to the purple patch of the U.S. dollar in the aftermath of the election. The President-elect’s policies seem to be a boon for the dollar and potentially from an inflationary standpoint, it could slow down the Fed’s rate-cutting trajectory in 2025, according to Tim Waterer, chief market analyst at KCM Trade.
Gold is considered a hedge against inflation, but higher interest rates reduce the appeal of the non-yielding asset.
Focus is on the October CPI data on Wednesday, the PPI and weekly jobless claims on Thursday, and retail sales data on Friday.
Multiple U.S. central bank officials are also scheduled to speak this week, including Fed Chair Jerome Powell.
There is still a fundamental path higher for gold, though it will likely require the dollar to lose some momentum. A soft inflation report would increase the odds of a December rate cut, which may give gold a reprieve, Waterer said.
Traders see a 68.5% probability of a rate cut in December, versus nearly 80% probability before Trump’s victory, as per the CME FedWatch Tool.
