Gold slips as dollar firms; market looks to US data

Gold prices fell on Monday as the US dollar held firm, while investors awaited US economic data for fresh insights on the Federal Reserve's monetary policy path.

Spot gold fell 0.4% to $2,735.47 per ounce, as of 0527 GMT. Bullion hit a record high of $2,758.37 on Wednesday of last week.

US gold futures declined 0.3% to $2,747.70.

The dollar index was on track for its best month since April 2022. A stronger dollar makes gold less appealing for other currency holders.

"The US dollar has continued its good run of form in the aftermath of the Japanese election, which has dented gold's appeal," said Tim Waterer, chief market analyst at KCM Trade.

"Gold still looks in good shape to potentially make a push towards $2,800 and beyond but it will first have to navigate a batch of key macro data this week, which could have interest rate implications for the Fed."

Data lined up for the week includes the US employment report, job openings, and core Personal Consumption Expenditures (PCE) data, which are vital for assessing the labour market's health and inflation trends.

Traders now see a nearly 95% chance of a 25-basis-point cut by the Fed in November. Lower rates raise the relative appeal of non-yielding bullion.

Gold drew support from uncertainty surrounding the US election on Nov. 5, with recent polls showing a tight contest between Donald Trump and Kamala Harris. Bullion is considered a hedge against political and economic uncertainty.

On the physical front, China's gold consumption dropped 11.18% year-on-year in the first three quarters of 2024 to 741.732 metric tons as high prices reduced jewellery demand, according to the state-backed gold association.

Spot silver was down over 1% at $33.35 per ounce and platinum fell 0.7% to $1,015.67.

Palladium edged down 0.1% to $1,192.31 an ounce after hitting a 10-month high in the previous session.