Gold Prices Fall as Dollar Strengthens

2 Dec 2024 , 09:23 AM

As the dollar strengthened and market players anticipated important U.S. economic data for hints on the Federal Reserve’s monetary policy stance, gold prices fell on Monday, ending a four-session rise.

Spot gold dropped 0.7% to $2,633.86 an ounce. At $2,656.40, U.S. gold futures fell 0.9%.

The dollar index increased by 0.4%, increasing the cost of bullion for holders of foreign currencies.

The ADP employment report, payrolls report, and U.S. job openings are among the important U.S. data that are coming this week.

The markets presently expect a 65.2% possibility of a 25 basis point cut by the Fed in December, according to the CME Group’s FedWatch Tool.

As traders anticipate that the Trump administration’s potential increased tariffs will keep interest rates higher for an extended period of time, the bullion saw a fall of more over 3% in November, marking its worst monthly performance since September 2023.

According to data released this week, the Fed may proceed cautiously with more cuts as progress in reducing U.S. inflation appears to have halted in recent months.

Although gold is regarded as an inflation hedge, higher interest rates make owning the non-yielding asset less alluring.

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