WASHINGTON (dpa-AFX) - Despite a weak dollar, gold prices fell on Monday amid slightly waning prospects of an early interest rate cut by the Federal Reserve.
U.S. Labor Department's data on consumer and producer price inflation, due later in the week, is awaited for clarity on Fed's interest rate outlook.
While the Fed is widely expected to leave interest rates unchanged when it meets later this month, the data could impact expectations regarding a rate cut in March.
Optimism about a March rate cut have recently waned, although CME Group's FedWatch Tool currently still indicates a 62.7% chance of a decrease.
The dollar index dropped to 102.08 and despite recovering to 102.28, remains below the flat line, losing about 0.12%.
The dollar received some support after U.S. Congressional leaders agreed on the overall spending level for the current fiscal year in an attempt to avoid a partial government shutdown later this month.
Gold futures for February settled at $2,033.50, down $16.30, after posting gains in the previous two sessions.
Silver futures for March ended down $0.006 at $23.202 an ounce, while Copper futures for March ended higher by $0.0040 at $3.8100 per pound.
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