Gold declines on stronger U.S. dollar in thin trading

One ounce Fine Gold Coins are displayed in the safe deposit boxes room at the Pro Aurum gold house in Munich, Germany, Friday, April 25, 2025. (AP Photo/Matthias Schrader, File)

Gold prices fell in low market liquidity on Monday as key markets in the U.S. and Asia were shut for holidays, while a firm dollar put pressure on bullion.

Spot gold fell 0.9 per cent to US$4,997.77 per ounce by 1318 GMT, after losing more than one per cent earlier in the session.

U.S. gold futures GCcv1 for April delivery lost 0.6 per cent to $5,018.70 per ounce.

“Gold is range-trading around $5,000/oz in a week with lower liquidity due to holidays,” said UBS analyst Giovanni Staunovo.

U.S. markets were closed for Presidents Day, while markets in China and several other countries in Asia were closed for the Lunar New Year.

The dollar edged higher, making greenback-priced bullion more expensive for holders of other currencies.

Recent U.S. economic data painted a mixed picture for Federal Reserve interest rate cuts, as U.S. consumer prices increased less than expected in January, while job growth unexpectedly accelerated in the same month.

Federal Reserve Bank of Chicago President Austan Goolsbee said on Friday that interest rates could go down, but noted that services inflation remained high.

Market participants anticipate the U.S. central bank will keep rates steady at its next meeting on March 18.

Non-yielding bullion tends to do well in low-interest-rate environments.

On the geopolitical front, Iran is pursuing a nuclear agreement with the U.S. that delivers economic benefits for both sides, an Iranian diplomat was reported as saying on Sunday.

“I’d pull back my medium-term target for gold from $5,500 to closer to the $5,100 to $5,200 range for now, but this is a very fluid situation,” said Zain Vawda, analyst at MarketPulse by OANDA.

Meanwhile, spot silver lost 0.5 per cent to $77.01 per ounce after a three per cent drop earlier. The metal rose 3.4 per cent on Friday.

“As a more cyclically sensitive metal, any sign of a strong economy reduces (silver’s) safe-haven appeal relative to gold, and the strong jobs data suggests less immediate need for haven assets,” Vawda added.

Spot platinum slipped 1.9 per cent to $2,023.51 per ounce, while palladium shed 0.5 per cent at $1,694.06.

(Reporting by Pablo Sinha in Bengaluru; Editing by Kate Mayberry and Alexander Smith)