By Seher Dareen
(Reuters) – Gold prices fell on Monday due to an uptick in the dollar and bond yields, while investors looked ahead to more U.S. economic data amid expectations of a slower pace of rate hikes from the Federal Reserve.
Spot gold fell 0.2% to $1,922.45 per ounce by 12:02 p.m. ET (1702 GMT). It climbed to its highest since April 2022 on Friday.
U.S. gold futures were down 0.3% at $1,922.70.
“Bond yields ticked up slightly and the dollar has been going up here this morning – that’s just putting some pressure here on gold,” said Bob Haberkorn, senior market strategist at RJO Futures.
“A lot of people will start hopping in when we see some support around $1,950 to see the inevitable move towards $2,000.”
The dollar index was up 0.1%, making dollar-priced gold less attractive for buyers holding other currencies, while benchmark yields were near session-highs. [USD/]
Investors will be scanning the U.S. fourth-quarter GDP report on Thursday before the Fed policy meeting on Jan. 31-Feb. 1.
Traders are pricing in a 98% chance that the central bank will raise rates by 25 basis points (bps) next month, after slowing its pace to 50 bps last month, following four straight 75-bp hikes.
Zero-yield bullion tends to do well in a lower interest rate environment.
Meanwhile, India is expected to slash the import duty on gold, which could lift retail sales by making the metal cheaper ahead of peak demand season. [GOL/AS]
Elsewhere, spot silver dipped 2.8% to $23.27 per ounce, platinum fell 0.1% to $1,042.73 while palladium was down 0.7% to $1,715.75.
Analysts at Goldman Sachs said in a note that supply disruptions have partially reversed for both palladium and platinum, leading to a small surplus, but that surplus could “easily disappear if the expected recovery in South African mine production fails to materialise”.
(Reporting by Seher Dareen in Bengaluru; Editing by Jane Merriman)
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