Gold retreats

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BENGALURU- Gold prices dipped on Monday pressured by a firmer US dollar, while investors focused on the Federal Reserve’s first meeting of 2025 for more guidance on the US interest rate path.

Spot gold dropped 0.6 percent to $2,755.79 per ounce, after trading just below record high levels on Friday. US gold futures fell 0.6 percent to $2,761.20.

The dollar was up 0.3 percent after US President Donald Trump said he will impose sweeping measures on Colombia, including tariffs and sanctions. A stronger dollar makes gold expensive for other currency holders.

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“The US dollar could be the main culprit for gold’s weakness… However, current movement seems to suggest that downside for the yellow metal are still limited, potentially aided by safe-haven flows around US Colombia trade tensions,” IG market strategist Yeap Jun Rong said.

“We may still expect more upside for gold prices ahead, as uncertainties around trade measures are likely to dominate sentiments.”

Gold is considered a hedge against geopolitical turmoil and inflation. It also tends to thrive in a low interest rate environment as it yields no interest.

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