Gold futures settled notably lower on Monday as the dollar firmed against other major currencies ahead of the Federal Reserve’s monetary policy announcement, due this week.
Several other central banks, including the European Central Bank and the Bank of England, are also scheduled to announce their policy decisions this week. The Swiss National Bank and the Norges Bank as well are set to announce their policy moves during the course of this week.
Stronger than expected non-farm payrolls data suggest the Fed might continue to hold interest rates higher for a bit longer. There is speculation that the U.S. central bank could wait until May to begin lowering rates.
The dollar index climbed to 104.26, gaining about 0.25%.
Gold futures for February ended down $20.80 at $1,993.70 an ounce.
Silver futures for March ended lower by $0.218 at $23.058 an ounce, while Copper futures for March settled at $3.7805 per pound, down $0.0500 from the previous close.
Data on U.S. consumer and producer price inflation are also likely to attract attention in the coming days along with reports on retail sales and industrial production.
“Markets are very bullish in pricing in four interest rate cuts next year, the first likely coming in May, something the FOMC is unlikely to line up behind,” said Craig Erlam, OANDA Senior Market Analyst, UK & EMEA.
He added, “The question is how much of a change we’ll see from the September projections and to what extent the committee will push back against the markets.”
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