Gold prices saw a slight decline on Monday as U.S. Treasury yields strengthened, prompting investors to shift focus to upcoming economic data for indications on the Federal Reserve’s monetary policy in 2025. The central bank recently signaled a slower pace of rate cuts this year, influencing market sentiment.
By 0932 GMT, spot gold was down 0.2%, trading at $2,633.03 per ounce, while U.S. gold futures fell 0.4%, reaching $2,645.20.
Market Focus Shifts to Economic Data
“Gold is experiencing subdued momentum as Treasury yields rise, with traders now looking ahead to a series of U.S. economic reports this week to gauge the Fed’s stance on interest rates,” said Jigar Trivedi, senior analyst at Reliance Securities.
Key economic data this week, including the U.S. jobs report due on Friday, will provide fresh insights into the Fed’s future policy actions. Last month, the central bank startled markets by reducing its forecast for rate cuts, citing persistent inflation concerns. Analysts are also closely watching job openings data on Tuesday, ADP employment numbers, and the minutes from the Fed’s recent meeting on Wednesday for further signals.
Goldman Sachs Adjusts Gold Price Forecast
Goldman Sachs revised its gold price forecast, pushing back its $3,000 per ounce target to the second quarter of 2026, from an earlier projection of December 2025. The delay is attributed to fewer anticipated rate cuts by the Fed.
“Two opposing factors—reduced speculative demand and stronger central bank buying—have largely offset each other, keeping gold prices range-bound in recent months,” Goldman said in a report, noting that ETF demand has been weaker than expected.
Inflation Concerns and Geopolitical Uncertainty
Market watchers are also keeping an eye on potential inflationary pressures, particularly with U.S. President-elect Donald Trump set to return to office on January 20. His proposed tariffs and protectionist policies are expected to intensify inflationary pressures.
While bullion is often seen as a hedge against inflation and economic uncertainty, the appeal of gold diminishes in a high-interest rate environment. “We also expect a de-escalation in geopolitical tensions in the Middle East, which could reduce safe-haven demand for gold,” added Trivedi.
Precious Metals Show Mixed Movements
Meanwhile, other precious metals saw mixed movement. Spot silver rose by 0.4%, reaching $29.73 per ounce, platinum increased by 0.7% to $945.15, and palladium slipped 0.1%, trading at $921.50 per ounce.
Conclusion
As rising U.S. Treasury yields weigh on gold’s appeal, traders are looking ahead to crucial economic data that may offer clues on the Federal Reserve’s interest rate policy in the coming year. While gold remains under pressure due to higher yields and reduced speculative demand, geopolitical tensions and inflation concerns could still provide support for the precious metal in the long term. However, the outlook for gold remains uncertain, with central bank policies and broader economic conditions set to shape its future direction.