Gold Slips as Dollar Strengthens, Traders Await Central Bank Meetings

Gold prices fell on Monday as a stronger U.S. dollar and signs of easing trade tensions between Washington and Beijing dampened safe-haven demand ahead of key central bank decisions later this week.

Spot gold slipped 1% to $4,072.65 per ounce by 0504 GMT, while U.S. gold futures for December delivery declined 1.3% to $4,085.60.

The dollar climbed to a two-week high against the yen, making gold less attractive for non-U.S. buyers. Optimism grew after U.S. and Chinese officials outlined a potential trade framework for Presidents Trump and Xi to finalize later this week.

“The potential trade deal came out of the blue and has been a positive surprise for markets. Naturally, that’s weighed on gold,” said Kyle Rodda, analyst at Capital.com. “However, expectations of continued loose fiscal and monetary policy should keep gold’s uptrend intact.”

Investors are now focused on the Federal Reserve meeting on Wednesday, where a 25-basis-point rate cut is widely expected. Markets will closely watch Chair Jerome Powell’s forward guidance for clues on future easing.

Gold typically benefits from lower interest rates, which reduce the opportunity cost of holding non-yielding assets.

Meanwhile, SPDR Gold Trust (GLD) holdings fell 0.52% to 1,046.93 metric tons on Friday. Silver dropped 1.3% to $48.04, platinum edged down 0.1% to $1,604.80, and palladium slipped 0.8% to $1,418 per ounce.