US markets shut as gold slides more than 1% and stronger dollar weighs on prices
Gold fell more than 1% in thin holiday trading as key markets in the US and parts of Asia were closed, while a firmer dollar added pressure. Investors are watching signals on the Fed’s rate path ahead of the March 18 meeting.
Gold prices fell more than 1% in global trading on Monday amid thin liquidity, as major markets in the United States and several Asian countries were closed for holidays. The stronger US dollar added further pressure to gold.
Spot gold slipped 1.3% to US$4,976.37 an ounce as of 16:19 GMT, while US gold futures for April delivery fell 1% to US$4,996.60 an ounce.
Giovanni Staunovo, an analyst at UBS, said gold was trading in a range around US$5,000 an ounce during a week of low liquidity due to the holiday period.
US financial markets were closed for Presidents’ Day, while markets in China and several other Asian countries were shut for Chinese New Year, reducing overall trading volumes.
The US dollar edged higher, making dollar-priced gold more expensive for holders of other currencies.
Recent US economic data has sent mixed signals on the outlook for Federal Reserve rate cuts, with January consumer price inflation rising less than expected, while job growth came in stronger than forecast.
The president of the Federal Reserve Bank of Chicago said interest rates could fall in the future, but policymakers still need to watch elevated inflation pressures in the services sector. Markets currently expect the Fed to keep rates unchanged at its next meeting on March 18.
Gold, which does not provide interest income, typically benefits in a lower interest-rate environment.
On geopolitics, reports said Iran is pressing ahead with nuclear deal talks with the United States, which could bring economic benefits to both sides.
