Gold prices fell more than 1% in low market liquidity on Monday as key markets in the U.S. and Asia were shut for holidays, while a firm dollar put pressure on bullion. Spot gold was down 1.3% at $4,976.37 per ounce by 1619 GMT. U.S. gold futures for April delivery lost 1% to $4,996.60 per ounce. Get the latest news from India and how it matters to the world with the Reuters India File newsletter. Sign up here. "Gold is range-trading around $5,000/oz in a week with lower liquidity due to holidays," said UBS analyst Giovanni Staunovo. Advertisement · Scroll to continue
U.S. markets were closed for Presidents Day, while markets in China and several other countries in Asia were closed for the Lunar New Year. The dollar edged higher, making greenback-priced bullion more expensive for holders of other currencies. Recent U.S. economic data painted a mixed picture for Federal Reserve interest rate cuts, as U.S. consumer prices increased less than expected in January while job growth unexpectedly accelerated in the same month. Federal Reserve Bank of Chicago President Austan Goolsbee said on Friday that interest rates could go down, but noted that services inflation remained high. Advertisement · Scroll to continue
Market participants anticipate the U.S. central bank will keep rates steady at its next meeting on March 18. Non-yielding bullion tends to do well in low-interest rate environments. FEDWATCH On the geopolitical front, Iran is pursuing a nuclear agreement with the U.S. that delivers economic benefits for both sides, an Iranian diplomat was reported as saying on Sunday. "I'd pull back my medium-term target for gold from $5,500 to closer to the $5,100-$5,200 range for now, but this is a very fluid situation," said Zain Vawda, analyst at MarketPulse by OANDA. Meanwhile, spot silver lost 2% to $75.83 per ounce after a 3% drop earlier. The metal rose 3.4% on Friday. "As a more cyclically sensitive metal, any sign of a strong economy reduces (silver's) safe-haven appeal relative to gold, and the strong jobs data suggests less immediate need for haven assets," Vawda added.
