Gold slips as dollar strengthens; investors await US data

Mon Dec 02 2024

Gold prices slipped on Monday, snapping a four-session rally as the dollar firmed, while market participants awaited key U.S. economic data for clues on the Federal Reserve's monetary policy outlook.

FUNDAMENTALS

* Spot gold fell 0.7% to $2,633.86 per ounce, as of 0047 GMT. U.S. gold futures edged 0.9% lower to $2,656.40.

* The dollar index rose 0.4%, making bullion costlier for other currency holders.

* Key U.S. data due this week includes U.S. job openings, the ADP employment report and payrolls report.

* According to the CME Group's FedWatch Tool, markets currently see a 65.2% chance of a 25-basis-points reduction by the Fed in December.

* The bullion declined over 3% in November and registered its worst monthly performance since September 2023, as traders expect the prospect of higher tariffs under the Trump administration to keep interest rates higher for longer.

* Data released last week showed progress in lowering U.S. inflation appears to have stalled in the past months, suggesting the Fed may proceed cautiously with further cuts.

* Gold is considered a hedge against inflation but higher rates dull the appeal of holding the non-yielding asset.

* Elsewhere, physical gold premiums were steady in India last week, as a rise in demand from the previous week's price correction was later countered by higher rates, while demand in other major Asian hubs and top consumer China remained subdued.

* Spot silver shed 0.7% to $30.40 per ounce, platinum fell 0.4% to $942.25 and palladium fell 0.8% to 971.21.