Gold drops as dollar strength sours four-session rally

Gold prices slipped on Monday, snapping a four-day winning streak, as the U.S. dollar staged a sharp rally and investors braced for pivotal economic data and Federal Reserve insights on the path of interest rates.

Spot gold was down 0.3% at $2,646.50 per ounce as of 10:09 a.m. ET (1509 GMT), having fallen as much as 1% earlier in the day. U.S. gold futures dropped 0.4% to $2,670.

“A firmer dollar that’s being driven at least to some degree by Trump’s comments,” is pressuring gold prices, said Peter Grant, vice president and senior metals strategist at Zaner Metals.

Although, Grant noted that gold has pared some of its earlier losses, with bullion being supported by persistent geopolitical uncertainty.

He said the downside is limited and expects a choppy, consolidative gold market into year-end.

The dollar index surged 0.8%, poised for its strongest daily performance in nearly four weeks, pressuring gold by making the greenback-priced metal more costly for buyers using other currencies. [USD/]

President-elect Donald Trump over the weekend urged BRICS nations not to back or create alternatives to the U.S. dollar, threatening 100% tariffs for defiance.

The warnings stoked fears of prolonged higher U.S. interest rates, which already triggered a 3% drop in non-yielding gold during November, the sharpest monthly decline since September 2023.

Key U.S. economic events this week include job openings data, ADP employment report and non-farm payrolls. Speeches from Fed officials, including Chair Jerome Powell, will also draw attention.

“We note strong downside risks to gold in 2025, and anticipate significant volatility as we will likely see the U.S. Federal Reserve take a more cautious approach to interest rate cuts, to the detriment of gold,” BMI analysts said in a note.

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After last month’s 25-basis-point reduction to 4.50%-4.75%, markets now peg the odds of another cut in December at 64%, aligning with major brokerages’ expectations.

Elsewhere, spot silver shed 0.4% to $30.48 per ounce, platinum ticked down by 0.2% to $943.65 and palladium rose 1.1% to $989.