Gold Starts December with 1% Drop After Four Sessions of Gains
Gold prices dropped 1% on Monday morning, halting a four-session rally as the U.S. dollar gained strength.
Spot gold fell 0.9% to $2,630.99 per ounce, after earlier dipping by as much as 1%. U.S. gold futures declined 1.01% to $2,653.80 per ounce. The dollar index rose 0.5%, marking its best performance in over a week, making gold more expensive for holders of other currencies.
The dollar’s rise was partly supported by remarks from President-elect Donald Trump, who urged BRICS nations on Saturday to commit to not adopting or supporting an alternative currency to the U.S. dollar, warning of 100% tariffs if they did.
Gold experienced a sharp decline of over 3% in November, its worst monthly drop since September 2023, driven by concerns that Trump’s proposed tariff policies could extend the Federal Reserve’s higher interest rate regime.
Market participants anticipate further Fed rate cuts, including a likely 25-basis-point reduction in December, following last week’s PCE price index data that aligned with market expectations.
Gold Outlook
Analysts project that slower U.S. economic activity could prompt additional Fed rate cuts, potentially driving gold prices to $2,900 per ounce by mid-2025.
This week, investors will closely watch U.S. job openings data, the ADP employment report, and non-farm payrolls, as well as speeches from Federal Reserve officials, including Chair Jerome Powell.
Among other precious metals, spot silver fell 1.3% to $30.22 per ounce, platinum dropped 0.4% to $941.70 per ounce, and palladium declined 1.1% to $967.49 per ounce.
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