By Rahul Paswan
(Reuters) – Gold prices fell for a second straight session on Monday as investors waited this week for U.S. economic data and commentary from Federal Reserve officials for more clarity on the future direction of U.S. interest rates.
Spot gold fell 0.5% to $2,671.49 an ounce as of 0457 GMT. U.S. gold futures fell 0.6% to $2,678.50.
“Gold prices have previously been seen as a hedge against US political risks, and a faster-than-expected election outcome could trigger some near-term relaxation, along with the firmer US dollar,” IG said market strategist Yeap Jun. Rong.
The dollar index was slightly firmer after rising 0.6% last week, especially against the euro. A stronger dollar makes gold less attractive to other currency holders.
Gold prices recorded their worst week in more than five months on Friday after Donald Trump’s victory in the US presidential election raised the prospect of higher rates, which could keep yields high.
“We should expect the Fed to be more cautious in the upcoming easing process, which could limit gold prices,” Yeap said.
Bullion is considered a hedge against inflation, but higher interest rates increase the opportunity cost of holding it.
Several Fed officials, including Chairman Jerome Powell, are scheduled to speak this week. Also expected this week are US consumer and producer price indexes, weekly unemployment claims and retail sales.
Traders see a 65% chance of another 25 basis point Fed rate cut in December and a 35% chance of no change, according to the CME Fedwatch tool.
Elsewhere, consumer prices in top consumer country China rose at the slowest pace in four months in October, while producer price deflation deepened even as Beijing doubled down on stimulus measures to support the sputtering economy.
Silver fell 0.4% to $31.16 an ounce, platinum rose 0.6% to $973.99 and palladium rose 0.9% to $997.41.
(Reporting by Rahul Paswan in Bengaluru; Editing by Mrigank Dhaniwala and Subhranshu Sahu)
