By Rahul Paswan
(Reuters) – Gold prices fell on Monday for a second consecutive session as investors awaited U.S. economic data and comments from Federal Reserve officials this week for more clarity on the future direction of U.S. interest rates.
Spot gold dropped 0.5% to $2,671.49 per ounce, as of 0457 GMT. U.S. gold futures fell 0.6% to $2,678.50.
“Gold prices were previously seen as a hedge against U.S. political risks, and a quicker-than-expected conclusion in the elections may be a trigger for some near-term unwinding, along with the firmer U.S. dollar,” said IG market strategist Yeap Jun Rong.
The dollar index was a fraction firmer, after gaining 0.6% last week mainly against the euro. A stronger dollar makes gold less appealing for other currency holders.
Gold prices registered their worst week in more than five months on Friday as Donald Trump’s victory in the U.S. presidential election has raised the prospect of higher tariffs, which could keep interest rates elevated.
“We may expect the Fed to be more cautious in its easing process ahead, which could cap gold prices,” Yeap said.
Bullion is considered a hedge against inflation, but higher interest rates raise the opportunity cost of holding it.
Several Fed officials, including Chair Jerome Powell, are scheduled to speak this week. Also, U.S. consumer and producer price index data, weekly jobless claims and retail sales figures are due this week.
Traders see a 65% chance of another 25-basis-point Fed rate cut in December and a 35% chance of no change, according to the CME Fedwatch tool.
Elsewhere, consumer prices in top consumer China rose at the slowest pace in four months in October while producer price deflation deepened, even as Beijing doubled down on stimulus to support the sputtering economy.
Spot silver fell 0.4% to $31.16 per ounce, platinum rose 0.6% to $973.99, and palladium climbed 0.9% to $997.41.
(Reporting by Rahul Paswan in Bengaluru; Editing by Mrigank Dhaniwala and Subhranshu Sahu)
