Gold prices dip as yields rise

Gold prices fell on Monday as US Treasury yields rose, while the Federal Reserve’s recent hint at a slower pace of rate cuts in 2025 kept investors keenly awaiting a slew of economic data due this week to shed more light on that view.

Spot gold fell 0.3% to $2,632.47 per ounce by 9:55 a.m. ET (1455 GMT). U.S. gold futures were down 0.4% at $2,644.50.

“Bond yields are back up again, placing pressure on gold,” said Nitesh Shah, commodity strategist at WisdomTree.

Yield on the 10-year U.S. Treasury Note rose to an over one-week high, making non-yielding gold less attractive.

“We expect a $3,050/oz by the end of the year based on a ‘consensus’ economic view of dollar depreciation and falling bond yields. Further escalation in tension in the Middle East could drive upside risk to our forecast,” Shah said.

The Fed’s latest projections in December implied a shift to a more cautious pace of rate cuts this year, with the majority of the policymakers expressing concern that inflation could reignite.

The central bank may need to keep rates higher for longer to address persistent inflation, which remains above its 2% target.

US President-elect Donald Trump takes office on Jan. 20, and his proposed tariffs and protectionist policies are expected to stoke further inflation.

“There’s speculation that Trump is going to pull back on tariffs… If (the prices of) commodities go up, inflation’s going to remain higher for longer,” Phillip Streible, chief market strategist at Blue Line Futures, said.

Gold slid despite the dollar index slumping 1%, down from a more-than-two-year high on Thursday.

Market participants now look ahead to the U.S. jobs report on Friday, which could help illuminate the Fed’s policy path going forward.

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Investors are also awaiting job openings data on Tuesday, ADP employment numbers and the minutes from the Fed’s most recent policy meeting on Wednesday.

Spot silver gained 1.2% to $29.97 per ounce, platinum rose 0.3% to $941.01, and palladium added 0.5% to $927.21.