Gold price tumbled below the key $2,000 mark on Monday, hitting its lowest in two weeks. The decline reflects growing investor caution ahead of crucial central bank meetings this week. The Federal Reserve, the European Central Bank, and the Bank of England are all expected to announce their latest monetary policy decisions, with potential implications for the global economy and, consequently, gold prices.
Traders are also closely monitoring upcoming US inflation data, which could offer further clues about the future of interest rates. Friday’s stronger-than-expected US jobs data had already dampened hopes of an early Fed rate cut – previously anticipated for as early as March 2024.
The November jobs report revealed a robust US labor market, exceeding expectations with a gain of nearly 200,000 new jobs. This figure significantly surpassed the projected 180,000 net increase. Moreover, the unemployment rate surprisingly dipped, wage growth remained strong, and the labor force grew.
This confluence of factors indicates a robust US economy, which generally weakens the appeal of safe-haven assets like gold. However, investors remain apprehensive about the potential for future economic turbulence, which could still drive gold prices higher in the long run.