Gold Slips as Dollar Gains Amid Rate Cut Speculations

Gold prices slightly decreased as the U.S. dollar strengthened, following significant gains driven by lower-than-expected inflation data that spurred hopes for Federal Reserve interest rate cuts. The market anticipates multiple rate cuts, while the Federal Reserve plans to appoint a new director amid geopolitical tensions involving the U.S., Iran, and Israel.

Gold experienced a slight decline on Monday, influenced by a strengthening U.S. dollar following a substantial over 2% increase in the previous session. The recent inflation data, cooler than anticipated, has energized expectations for interest rate cuts by the Federal Reserve, causing shifts in market dynamics.

The spot price of gold fell 0.4% to $5,020.10 per ounce as of 0111 GMT, following a 2.5% gain in the last trade. Concurrently, U.S. gold futures for April delivery shed a marginal 0.1%, settling at $5,039.50 per ounce, contributing to the day-to-day volatility in the bullion market.

While the U.S. dollar index climbed, making bullion costlier for those dealing in other currencies, the U.S. Consumer Price Index registered a 0.2% rise in January, sparking discussions on potential rate cuts. Notably, the Federal Reserve is poised to name a new director amidst ongoing geopolitical tensions, highlighting uncertainties beyond economic metrics.

(With inputs from agencies.)