IGI Logo

 Gold prices fell to their lowest in more than a week on Monday as the U.S. dollar firmed, while market focus shifted to a series of economic data due this week for clues to the extent of rate cuts in the Federal Reserve's September meeting.

Spot gold was little changed at $2,505.11 per ounce, as of 0903 GMT after dipping to its lowest since Aug. 23 earlier in the session.

U.S. gold futures rose 0.4% to $2,537.30. Trading is expected to be light with U.S. markets closed for a holiday.

"To move higher from here we need to have more clarity whether it will be 25 (bps) rate cut or 50 (bps) rate cut and probably by the end of the week, with the employment data, we might get more clarity on that side," UBS analyst Giovanni Staunovo said.

Traders await a slew of U.S. economic data pending this week including the ISM surveys, JOLTS job openings, ADP employment and the non-farm payrolls report.

The markets broadly expect the Fed to cut rates at its Sept. 17-18 meeting, which would mark its first cut in this policy cycle.

According to the CME FedWatch tool, investors now see a 69% chance of a 25-basis-point cut and a 31% chance of a 50 bps cut in September. Lower rates reduce the opportunity cost of holding non-yielding gold.

"Falling real U.S. interest rates could remain as tailwind for the yellow metal, alongside healthy central bank demand and room for further catch-up in ETF flows," IG market strategist Yeap Jun Rong said in a note. [GOL/ETF]

The dollar hovered near a two-week peak hit earlier in the session, making bullion more expensive to holders of other currencies. [USD/]

Elsewhere, spot silver fell 0.7% to $28.64 per ounce, and hit its lowest in over two weeks.

Platinum gained 0.4% to $929.75 and palladium was up 0.4% at $969.02.