By Arundhati Sarkar
(Reuters) – Gold prices fell on Monday as a stronger dollar dented the safe-haven metal’s appeal, with investors awaiting U.S. non-farm payrolls data and minutes of the latest Federal Reserve meeting due later this week.
Spot gold slipped 0.4% to $1,911.70 per ounce by 0857 GMT. U.S. gold futures dropped 0.51% to $1,919.40.
Bullion lost 2.5% in the April-June quarter.
There is a slight decline in gold mainly due to the risk-on mood in the market, said Carlo Alberto De Casa, external analyst at Kinesis Money.
But the precious metal is holding above the $1,900 mark despite the rate hike outlook, and prices could trade in the $1,900-$1,930 range before the release of minutes of the June 13-14 Federal Open Market Committee (FOMC) meeting as investors await further news, De Casa added.
The dollar index rose 0.3% making gold more expensive for other currency holders, while the benchmark 10-year U.S. Treasury yield, which last week rose to its highest level since March, was last up at 3.844%. [MKTS/GLOB] [USD/]
Stagnant U.S. consumer spending in May suggested the Fed’s rate hikes to tame inflation were slowly working. But the core PCE price index, the Fed’s preferred measure of tracking inflation, rose 4.6% year-on-year, after climbing 4.7% in April.
Therefore, it’s still too early to suggest that the Fed can already think about rate cuts, and gold could be dragged into sub-$1,900 waters once more if another resilient U.S. jobs report on Friday paves the way for a persistently-hawkish Fed, said Han Tan, chief market analyst at Exinity.
High interest rates discourage investment in non-yielding gold, and investors see an 89% chance of a 25 basis points U.S. rate hike in July, according to CME’s Fedwatch tool.
Among other precious metals, spot silver held steady at $22.7667 per ounce, while platinum fell 0.6% to $895.61. Palladium ticked down 0.3% to $1,224.34.
(Reporting by Arundhati Sarkar in Bengaluru; Editing by Susan Fenton)
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