Gold pulled back from a two-week high on Monday as a firmer dollar pressured the metal, though easing bets on U.S. rate hikes limited the losses. Attention has turned to this week's FOMC minutes, and major banks remain far apart on where bullion goes next.
Gold slipped as the dollar edged up from recent lows, but softer expectations for U.S. interest rate hikes kept the decline shallow. Spot gold was down 0.2% at $4,165.21 per ounce as of 0750 GMT, after hitting its highest since June 22 earlier in the day. U.S. gold futures for August delivery climbed 1.3% to $4,177.20 per ounce.
The dollar gained 0.2%, making greenback-priced bullion more expensive for holders of other currencies. According to Reuters: "Gold continues to face headwinds from a resilient U.S. dollar," said Tim Waterer, chief market analyst at KCM Trade.
Softer payrolls cool rate-hike bets
Bullion gained more than 2% last week, snapping a four-week losing streak, after softer-than-expected payrolls data eased worries about persistent inflation. Data on Thursday showed U.S. job growth slowed sharply in June, with payroll gains for the prior two months revised lower, pointing to a cooling labour market.
Because of that, markets dialled back bets for a near-term Federal Reserve rate hike. Traders now see about a 56% chance of a rate increase in September, down from more than 60% before the data, according to the CME FedWatch tool. Lower rates tend to be favourable to gold, since it is a non-yielding asset.
Banks split on the outlook
The uncertain Fed path has widened the gap between major banks, whose forecasts now range from $4,300 to $5,200 an ounce. Goldman Sachs is among the most bullish, seeing $4,900 an ounce by the end of 2026.
J.P. Morgan is more cautious, saying demand from key sectors would not be as strong as it had expected and capping bullion at $4,300 in the third quarter and $4,500 in the fourth. Among other metals, spot silver fell 0.2% to $62.28 per ounce, while platinum gained 0.7% and palladium rose 1.1%. Traders now look to this week's FOMC minutes for a clearer read on whether the inflation picture leaves room for another hike.
Sources: MarketScreener, Türkiye Today
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