Gold prices fell on Monday as the U.S. dollar strengthened, following gains of more than 2% for the precious metal in the previous session. Lower-than-expected U.S. inflation data boosted expectations of interest rate cuts by the Federal Reserve (the U.S. central bank).
Spot gold declined by 0.4% to $5,020.10 per ounce, after rising 2.5% in the previous session.
The dollar index rose on Monday, making gold—priced in U.S. currency—more expensive for holders of other currencies.
The U.S. Department of Labor reported on Friday that the Consumer Price Index (CPI) increased by 0.2% in January, below economists’ expectations of a 0.3% rise, following an unrevised 0.3% increase in December. Lower inflation typically raises the likelihood of interest rate cuts.
According to data compiled by the London Stock Exchange Group (LSEG), market participants currently expect a total of 75 basis points in rate cuts this year, with the first reduction anticipated in July.
Gold, which does not yield interest, tends to perform better in a low-interest-rate environment.
As for other precious metals, spot silver fell 0.6% to $76.92 per ounce after gaining 3% on Friday. Platinum declined 0.4% to $2,054.35 per ounce, while palladium rose 0.4% to $1,692.23 per ounce.
— Reuters
