Spot gold was down 0.2% at $1,918.72 per ounce by 2:30 p.m. ET, while U.S. gold futures fell 0.3% to $1,941.70.
The dollar index, which measures the greenback against a basket of major currencies, rose 0.2%. A stronger dollar makes gold more expensive for buyers holding other currencies.
Investors are awaiting the release of U.S. consumer price index (CPI) data on Wednesday. The data is expected to show that inflation rose 0.6% in August, the fastest pace in 13 years.
A higher-than-expected inflation print could increase expectations for more interest rate hikes from the Federal Reserve, which would weigh on gold prices.
However, some analysts believe that gold could still find support if the inflation data comes in line with expectations.
“Even if we get a strong CPI print, I don’t think it will be enough to derail the Fed’s current dovish stance,” said Peter Fertig, analyst at Quantitative Commodity Research. “The Fed is still likely to keep rates on hold at next week’s meeting.”
Fertig added that gold could also benefit from safe-haven demand if the European Central Bank (ECB) announces a rate hike on Thursday.
The ECB is widely expected to keep rates unchanged, but some analysts believe that the bank could surprise markets with a hike.
“If the ECB does hike rates, it could trigger a flight to safety into gold,” said Harshal Barot, senior consultant at Metals Focus.
Elsewhere, silver fell 0.2% to $23.02 per ounce, platinum was down 0.2% to $896.61 and palladium shed 0.2% to $1,214.84.
- The article mentions that the European Commission has forecast that the eurozone economy will grow slower than previously expected this year. This is a significant development that could have implications for gold prices.
- The article also mentions that gold could benefit from safe-haven demand if the ECB announces a rate hike on Thursday. This is a possibility that investors should keep in mind.
- Finally, the article provides updated prices for gold, silver, platinum, and palladium. This information can be helpful for investors who are considering trading these commodities.