Gold Prices Dip Amid Low Market Liquidity and Strong Dollar

Gold prices dropped on Monday due to low market liquidity as U.S. and Asian markets closed for holidays. The firm dollar added pressure, with spot gold falling 0.9%. Analysts note range trading around $5,000 due to less liquidity, while market participants anticipate steady interest rates at the Fed's next meeting.

Gold prices experienced a decline on Monday, prompted by low market liquidity with the closure of key markets in the U.S. and Asia owing to holidays. This, coupled with a robust dollar, exerted pressure on bullion, causing spot gold to fall by 0.9% to $4,997.77 per ounce as of 1318 GMT, after an earlier drop exceeding 1% during the session.

April delivery U.S. gold futures decreased by 0.6% to $5,018.70 per ounce. UBS analyst Giovanni Staunovo noted that gold is currently range-trading around $5,000 per ounce amidst a week of lower market liquidity. The firm dollar, as it edged higher, rendered greenback-priced bullion more costly for non-dollar currency holders.

Despite markets being closed for Presidents Day in the U.S. and Lunar New Year in Asia, along with mixed U.S. economic signals, market participants expect the Federal Reserve to keep interest rates steady on March 18. Additionally, geopolitical developments, including Iran's pursuit of a nuclear agreement with the U.S., continue to influence market dynamics.