Gold prices suffered slight losses in early trading on Monday, as bets increased on a smaller U.S. interest rate cut in November, after strong jobs data, while investors awaited inflation data and comments from Federal Reserve officials for further clues.
Update prices
Spot gold was down 0.2 percent at $2,647.49 per ounce by 0432 GMT. U.S. gold futures were unchanged at $2,667.10.
A stronger-than-expected September jobs report released Friday dampened expectations of a major U.S. interest rate cut next month, boosting the dollar.
Traders now see a 98 percent chance that the Fed will cut rates by just a quarter of a percentage point next month.
Geopolitical risks in the Middle East could support safe-haven flows into the yellow metal, limiting the downside from market expectations of less easing, said IG market analyst Yip Jun Rong.
Gold tends to be a preferred investment during low interest rates and amid political and economic uncertainty.
Market participants will focus this week on the minutes of the Federal Reserve’s latest policy meeting, and the US CPI and PPI data. A number of Fed officials will also speak this week.
In the Middle East, Israel bombed the Gaza Strip and Hezbollah targets in Lebanon on Sunday, the eve of the first anniversary of the October 7 attacks that sparked the war.
On the other hand, the Chinese central bank refrained from buying gold for its reserves for the fifth consecutive month in September.
With gold prices near record highs, China may hold off on further buying in the near term, but the overall bullion buying trend could continue due to its sensitive relations with the West and its desire to diversify away from the U.S. dollar, Yip said.
Among other precious metals, spot silver fell 0.2 percent to $32.11 an ounce, platinum lost 0.4 percent to $983.67, and palladium rose 0.6 percent to $1,017.63 an ounce, according to Reuters data.
