Gold slips to over 1-week low as dollar firms, investors await more Fed cues

Gold prices fell to a more than one-week low on Monday as the dollar firmed, while traders awaited more US economic data and comments from Federal Reserve officials this week for clarity on the timeline for interest rate cuts.

Spot gold fell 0.2% to USD 2,394.18 per ounce, as of 1837 GMT. US gold futures settled 0.1% lower at USD 2,394.70.

The dollar rose, making gold more expensive for other currency holders.

“We’re seeing a quiet market today for gold” as “they’re waiting to see what exactly the change in the democratic party’s candidacy means for the election and for the country and the world overall,” said Jeffrey Christian, managing partner of CPM Group.

Joe Biden on Sunday announced he was exiting the US presidential race, and endorsed Vice President Kamala Harris as the Democratic candidate in the November election.

“It’s far too early for any strategic positions … longer-term is probably more favorable for gold if Trump is in the White House,” said StoneX analyst Rhona O’Connell in a note.

“Trump would be inflationary and potentially incendiary in geopolitical terms, while Harris’ foreign affairs policy is as yet undefined so that favors gold for now, but not possibly in the longer term.”

The market is now looking out for US gross domestic product data for the second quarter on Thursday, as well as the personal consumption expenditure (PCE) data on Friday.

Money markets are fully pricing in a 25-basis-point Fed rate cut by September, according to CME’s FedWatch data. Lower interest rates reduce the opportunity cost of holding non-yielding bullion.

Gold prices scaled an all-time high of USD 2,483.60 per ounce last week on increased chances of US interest rate cuts this year.

Spot silver fell about 0.6% to USD 29.09 after falling nearly 5% last week. Platinum slipped 1.5% to USD 947.88, while palladium rose 0.1% to USD 909.50.

(Reporting by Rahul Paswan in Bengaluru, additional reporting by Brijesh Patel; Editing by Shailesh Kuber and Mohammed Safi Shamsi)