Global gold prices fell during these moments of trading on Monday, coinciding with the rise of the US dollar, while investors await US economic data to gain new insights into the path of the Federal Reserve's monetary policy.
The US dollar index rose during today's trading, as it is heading to achieve its best month since April 2022. The rise in the dollar makes gold less attractive to holders of other currencies.
The US dollar continued its good run in the wake of the Japanese elections, which weakened the appeal of gold, said Tim Waterer, chief market analyst at KCM Trade.
However, gold still looks well-positioned to move towards $2,800 and beyond, but will first have to wait for a set of key macroeconomic data this week, which could have implications for Fed interest rates.
Economist Mohamed El-Erian stressed that the rise in gold prices to record levels reflects how global financial institutions are deliberately working to diversify their investments away from the dollar, whether in central bank reserves or the payments system.
Important upcoming data
Data due this week includes the US employment report, job openings, and core personal consumption expenditures (PCE) data, which are vital for assessing the health of the US labor market and inflation trends.
Consumer expectations for inflation over the next 12 months were steady at 2.7%, while longer-term inflation expectations fell to 3%, from 3.1% in September, University of Michigan data showed on Friday.
Traders now see about a 95% chance of a quarter-basis-point cut by the Fed in November, according to the Investing Saudi Arabia U.S. Rate Watch tool. Lower interest rates are making non-yielding bullion more attractive.
Gold prices hit an all-time high of $2,758.37 last Wednesday, driven by demand for gold as a safe haven due to geopolitical uncertainty.
Israeli Prime Minister Benjamin Netanyahu claimed the airstrikes severely damaged Iran's defenses, while Iranian Supreme Leader Ali Khamenei downplayed the damage.
Elsewhere, as the United States prepares for Election Day on November 5, uncertainty reigns, with recent polls showing a close race between Donald Trump and Kamala Harris.
Gold at settlement on Friday
Gold futures turned higher on Friday as investors monitored geopolitical tensions in the Middle East and economic data showed a decline in U.S. inflation expectations.
At the settlement of trades, gold futures for December delivery rose by 0.2%, or $5.7, to $2,754.60 per ounce, with the yellow metal achieving gains for the third week in a row, after rising this week by 0.9%.
Gold and dollar now
Spot gold fell 0.5% to $2,733.01 an ounce.
Meanwhile, US gold futures fell 0.3% to $2,745.5.
On the other hand, the US dollar index contracts rose by 0.2% to 104.32 points.
Other minerals
Spot silver fell 0.9 percent to $33.39 an ounce, while platinum fell 0.1 percent to $1,022.20. Palladium fell 0.3 percent to $1,189.27 after hitting a 10-month high in the previous session.
