Gold prices slipped in early Asian trading on Monday, May 6th, as the US dollar gained ground. Investors remained cautious, waiting for comments from Federal Reserve officials that could provide clues about the future of US interest rates.
Spot gold fell 0.3% to $2,294.97 per ounce as of 0040 GMT.
US gold futures mirrored the decline, dipping 0.3% to $2,301.00 per ounce. A stronger dollar makes gold less attractive for buyers holding other currencies.
Recent US economic data, showing slower-than-expected job growth in April, revived expectations of a potential interest rate cut by the Fed later in 2024.
Markets currently price a 67% chance of a rate reduction in September, according to the CME’s FedWatch Tool. Higher interest rates generally make holding non-interest-bearing gold less appealing to investors.
Federal Reserve officials continued to weigh in on monetary policy.
Austan Goolsbee, president of the Chicago Fed, advocated for a more detailed “dot plot” that incorporates individual economic forecasts from policymakers.
Meanwhile, New York Fed President John Williams emphasized the importance of the 2% inflation target for achieving price stability.
Physical gold demand in India remained muted last week despite a slight price dip.
Buyers seem to be holding out for a more significant price correction. In China, gold premiums dropped for the second consecutive week due to sluggish demand during the holiday season.
Other precious metals also saw some decline. Spot silver fell 0.2% to $26.49 per ounce, while platinum and palladium dipped by nearly 0.7% and 0.5% respectively, reaching $948.40 and $940.60 per ounce.
