Gold prices slip as dollar gains, investors assess US Fed's stance

Gold retreated on Monday as the dollar climbed, while investors looked for hints on easing Federal Reserve monetary policy that has kept a leash on prices.

Spot gold fell 0.6% to $1,647.17 per ounce by 0922 GMT. U.S. gold futures eased 0.3% to $1,651.40.

Expectations that some Fed officials were debating a pause in the rapid pace of interest rate hikes helped gold rally on Friday as the U.S. dollar eased. [USD/]

"(However), this morning a tiny rebound of the greenback is curbing gold's rebound in early trading," said Carlo Alberto De Casa, external analyst for Kinesis Money.

"The decline suggests that last week's rebound was a bit too quick and there are decent chances of seeing gold testing $1,630," De Casa added.

While gold is considered an inflation hedge, higher interest rates lift the opportunity cost of holding zero-yield bullion, and have led to a more than 9% fall in bullion so far this year. [USD/]

The Fed is widely expected to raise its benchmark overnight interest rate by 75 basis points at its November meeting.

Until then, investors will keep a close watch on the U.S. economic growth and core inflation prints this week, while the European Central Bank is widely expected to raise its rates by 75 basis points.

"I don't think gold is out of the woods yet," said City Index analyst Matt Simpson, adding gold's move will depend on data and cues from the Fed's next meeting on whether it's close to pausing or keep tightening rates.

Spot silver fell 1.6% to $19.10 per ounce while palladium rose 0.1% to $2,019.92.

Platinum shed 0.3% to $929.13, having hit a peak since Aug. 15 earlier in the session.

Markets in India, Thailand, Singapore and Malaysia were closed because of public holidays.

 

(Reporting by Arundhati Sarkar and Eileen Soreng in Bengaluru; Editing by Vinay Dwivedi)