Mumbai, 14 Oct (Commoditiescontrol): Gold prices declined on Monday, pressured by a stronger U.S. dollar as investors awaited new signals on the Federal Reserve's monetary policy.
Spot gold slipped 0.4% to $2,646.75 per ounce, retreating after a 1% rise in the previous session. U.S. gold futures also dropped 0.5% to $2,663.90.
The U.S. dollar index climbed 0.2%, making gold less appealing to holders of other currencies. Market sentiment remained cautious as investors focused on the Fed’s potential interest rate cut in November. Recent U.S. data showed producer prices remained flat in September, indicating a favorable inflation outlook.
This has strengthened expectations that the Fed will reduce rates by 25 basis points next month, with CME’s FedWatch tool placing the probability at 87%, and a 13% chance of no change.
Gold, a non-interest-bearing asset, is favored during periods of lower interest rates. Investors are also watching for U.S. retail sales data this week for further insights into the Fed’s next steps.
In other markets, spot silver dipped 1% to $31.21 per ounce, platinum lost 0.9% to $976.20, and palladium dropped 2.1% to $1,045.87.
Additionally, geopolitical tensions are in focus as the U.S. announced on Sunday it would deploy troops and an advanced missile defense system to Israel, following missile attacks from Iran.
Meanwhile, China's Finance Minister Lan Foan emphasized plans to boost government debt and provide support for the consumer and property sectors in an effort to revitalize the economy.
In Japan, Mitsui & Co. announced its return to global precious metals trading after a nine-year hiatus, aiming to hedge client risk.
(By Commoditiescontrol Bureau: 09820130172)
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