Gold prices drop 1% after four sessions of gains as US dollar strengthens

Gold dropped 1 per cent on Monday, ending a four-session winning streak, weighed down by a robust US dollar, as investors eyed upcoming economic data and remarks from Federal Reserve officials for clues on the future of US interest rates.

Spot gold was down 0.9 per cent to $2,630.99 per ounce, as of 0906 GMT. It was down 1 per cent earlier in the session.

US gold futures fell 1.01 per cent to $2,653.80.

The dollar index gained 0.5 per cent, on track for its best day in over a week, making greenback-priced bullion more expensive for holders of other currencies. [USD/]

"Some of the comments of President-elect Donald Trump towards the BRICS countries not to move away from the US dollar are supporting the dollar and moderately weighing on the gold prices today," said UBS analyst Giovanni Staunovo.

Trump on Saturday called on BRICS nations to pledge not to establish or endorse an alternative currency to the US dollar, warning of 100 per cent tariffs for non-compliance.

Bullion fell over 3 per cent in November, its steepest monthly drop since September 2023, amid fears that Trump's tariff plans could prolong higher interest rates.

The ongoing slowdown in US economic activity is expected to prompt further Fed rate cuts in December, boosting investment demand and driving gold to $2,900/oz by mid-2025, Staunovo added.

Major brokerages maintain their expectation of a 25 basis-point Fed rate cut in December, following PCE price index data aligning with market forecasts on Wednesday.

Key US economic events this week include job openings data, ADP employment report and non-farm payrolls. Speeches from Fed officials, including Chair Jerome Powell, will also draw attention.

"Gold's perceived status as a safe haven asset could continue to support demand - given ongoing policy uncertainty that could negatively impact the global economy, as well as various geopolitical tensions - along with purchases by central banks," NAB analysts said in a note.

Elsewhere, spot silver shed 1.3 per cent to $30.22 per ounce, platinum fell 0.4 per cent to $941.70 and palladium dropped 1.1 per cent to $967.49.