Spot Gold retreated on Monday, set to extend the 0.84% loss from the previous week, ahead of the key US CPI inflation report on Thursday that could affect Federal Reserve’s rate outlook.
The yellow metal came under pressure last week, as investors pared expectations of sizable and early interest rate cuts by the Fed this year, which underpinned the US Dollar and US Treasury yields.
Futures markets are now pricing an almost 64% chance of a rate cut in March, compared with 86% probability a week ago.
“I think we’re seeing some follow through from the strong jobs data. It’s all tied back to cooling off of expectations for rate cuts this year,” Kyle Rodda, financial markets analyst at Capital.com, was quoted as saying by Reuters.
Employers in all sectors of the US economy, excluding farming, added 216,000 jobs in December, official government data showed on Friday, which outstripped market expectations of 170,000.
As of 8:40 GMT on Monday Spot Gold was losing 0.82% to trade at $2,028.83 per troy ounce. The commodity has pulled back from a 4-week high of $2,088.54 per troy ounce, which it registered on December 28th.
Gold Futures for delivery in February were retreating 0.75% on the day to trade at $2,034.45 per troy ounce.
Elsewhere, Silver Futures for delivery in March were down 0.70% to trade at $23.152 per troy ounce.
The US Dollar Index, which reflects the relative strength of the greenback against a basket of six other major currencies, was edging up 0.10% to 102.533 on Monday. Last week, the DXY gained 1.04%, which marked its best weekly performance since mid-July 2023.
The benchmark US 10-year Treasury yield remained above 4%.
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