Metals Gold drops as dollar strength sours four-session rally; Fed in focus

Gold prices slipped on Monday, snapping a four-day winning streak, as the U.S. dollar staged a sharp rally and investors braced for pivotal economic data and Federal Reserve insights on the path of interest rates. Spot gold was down 0.6% at $2,636.54 per ounce as of 01:41 p.m. ET (1841 GMT), having fallen as much as 1% earlier in the day. U.S. gold futures settled 0.8% lower at $2,658.50. A firmer dollar driven partly by U.S. President-elect Donald Trump’s comments that BRICS nations should refrain from trying to replace the dollar is pressuring gold prices, said Peter Grant, vice president and senior metals strategist at Zaner Metals. Trump urged the nine-nation bloc not to back or create alternatives to the dollar, threatening 100% tariffs for defiance. This stoked fears that U.S. interest rates will remain high for a longer period. Such concerns had already triggered a 3% drop in non-yielding gold during November, the sharpest monthly decline since September 2023. Grant noted that gold has pared losses, with bullion being supported by persistent geopolitical uncertainty. He said the downside is limited and expects a choppy, consolidative gold market into year-end. The dollar index surged 0.7%, poised for its strongest daily performance in nearly four weeks, pressuring gold by making the greenback-priced metal more costly for buyers using other currencies. Key U.S. economic events this week include the release of job openings data, ADP employment report and non-farm payrolls. Speeches from Fed officials, including Chair Jerome Powell, will also draw attention. “We note strong downside risks to gold in 2025, and anticipate significant volatility as we will likely see the U.S. Federal Reserve take a more cautious approach to interest rate cuts, to the detriment of gold,” BMI analysts said in a note. After last month’s 25-basis-point reduction to 4.50%-4.75%, markets now peg the odds of another cut in December at 64%, aligning with major brokerages’ expectations. Elsewhere, spot silver shed 0.6% to $30.41 per ounce, platinum ticked up 0.1% at $946.25 and palladium rose 0.6% to $984.75