Gold prices remained stable on Monday, maintaining a steady course as the dollar lingered near a three-month high. Market participants were on alert for upcoming U.S. private payroll data, which is anticipated to provide insights into the Federal Reserve’s future monetary policy trajectory. By midday trading, spot gold was up 0.1% at $4,008.34 an ounce, while U.S. gold futures for December delivery increased by 0.7% to $4,022.40.
The dollar index was positioned near its recent high, which typically makes gold more expensive for holders of other currencies. Giovanni Staunovo, an analyst at UBS, noted that the market is currently in a consolidation phase. He pointed out that the absence of significant U.S. economic data complicates matters, yet he suggested that weaker economic indicators could lead to additional rate cuts by the Federal Reserve, potentially propelling gold prices to $4,200 per ounce by year-end.
Market expectations have shifted, with traders pricing in approximately a 70% probability of a Fed rate cut occurring in December, according to the CME’s FedWatch Tool. Low interest rates tend to favor non-yielding assets like gold, especially during periods of economic uncertainty.
Attention is particularly focused on the ADP U.S. employment data and ISM PMIs scheduled for release this week, as these reports could influence the Fed’s current stance. Additionally, China has recently terminated a longstanding tax exemption for certain gold retailers, which could dampen the ongoing surge in gold purchases in the largest global consumer market. UBS highlighted that while some market adjustments may be expected, the new regulation is not anticipated to significantly impact global gold prices due to robust investment demand and central bank activity.
Resistance for gold prices appears to exist in the range of $4,000 to $4,050, according to analysts at Heraeus, who suggested that prices could experience a downturn if they remain within this band. They indicated that a climb above $4,155 per ounce would signal a potential resurgence in the gold rally.
In broader market discussions, U.S. President Donald Trump made headlines last week by agreeing to reduce tariffs on Chinese goods in exchange for concessions from Beijing concerning illegal fentanyl trade, U.S. soybean purchases, and rare earths exports.
In other precious metals, spot silver rose by 0.2% to $48.75 an ounce, platinum gained 1.4% to reach $1,590.61, and palladium climbed 0.6% to $1,442.81.
