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Gold falls on dollar strength as hopes for big rate cut fade
Gold prices fell on Monday as the dollar remained strong and fresh jobs data prompted investors to scale back expectations for a rate cut by the U.S. Federal Reserve.
Spot gold fell 0.3% to $2,645 an ounce, retreating from a record high of $2,685.42 hit on Sept. 26.
U.S. gold futures fell 0.1% to $2,664.70.
The U.S. dollar index is hovering at a seven-week high, making the dollar-denominated metal more expensive for holders of other currencies.
Gold is a hedge against geopolitical and economic instability and typically thrives in a low interest rate environment.
According to the CME Group’s FedWatch tool, traders now see an 86% chance that the Fed will cut rates by just a quarter of a percentage point next month after last week’s U.S. jobs report reinforced the view that the economy is unlikely to need a big rate cut for the rest of the year.
The market is now awaiting the minutes of the Fed’s latest policy meeting and U.S. consumer and producer price data due later this week.
Elsewhere, the People’s Bank of China (PBOC) did not buy gold to add to its reserves for five straight months in September.
In other precious metals, spot silver fell 1.3% to $31.75, platinum lost 0.8% to $980.55 and palladium rose 0.8% to $1,020.25.
