Gold drops by 0.84% amid dollar gains

December 02, 2024 (MLN): Gold prices experienced a prominent decline of 0.84% ($22.31) to $2,626.80 per ounce [10:44 am] from the prior day's close of $2,650.35 per ounce.

Gold prices snapped a four-session rally to fall on Monday, pressured by a firmer U.S. dollar and profit-taking, while investors awaited key US economic data for cues on the Federal Reserve's monetary policy outlook, as reported by Reuters. 

Spot gold fell 0.7% to $2,636.38 per ounce. 

U.S. gold futures edged 0.8% lower to $2,658.80, Reuters noted. 

"The yellow metal has been facing some profit-taking lately as market participants unwind some of the geopolitical risk premium, alongside the strength in the U.S. dollar," said IG market strategist Yeap Jun Rong.

The dollar index gained 0.5%, making bullion costlier for holders of other currency.

Major U.S. data due this week includes U.S. job openings, the ADP employment report and the payrolls report. Few Fed officials are due to speak this week, including Fed Chair Jerome Powell on Wednesday.

According to the CME Group's FedWatch Tool, markets currently see a 65.4% chance of a 25-basis-points rate cut in December.

"If the Fed was to set the stage more clearly for a potential rate hold into 2025, we may likely see gold prices weigh further," Rong said.

Higher rates dull the non-yielding bullion's appeal.

Gold prices slipped over 3% in November to register its worst monthly performance since September 2023 as the prospect of higher tariffs under the incoming Donald Trump administration to keep interest rates higher for longer loomed.

The S&P 500 and Dow notched record closing highs in a shortened Black Friday session, lifted by technology stocks.

Trump on Saturday demanded that the BRICS countries commit to not creating a new currency or supporting another currency that would replace the U.S. dollar or face 100% tariffs.

Among other metals, spot silver shed 0.7% to $30.39 per ounce, platinum fell 0.2% to $944.20 and palladium dropped 0.3% to $975.44, Reuters reported. 

Copyright Mettis Link News