WASHINGTON (dpa-AFX) - Gold prices fell on Monday, weighed down by higher U.S. Treasury yields, and a slightly firm greenback, as investors assessed the likely move of the Federal Reserve with regard to interest rates.
The dollar index, which dropped to 107.74 in the European session, climbed to 108.38 later on in the day, but pared gains subsequently, easing to 108.06, up marginally from previous close.
Gold futures for January closed down $12.30 or about 0.47% at $2,606.10 an ounce.
Silver futures for January settled lower by $0.539 or about 1.82% at $29.106 an ounce, while Copper futures for January dropped to $4.0480 per pound, losing $0.0250 or 0.61%.
Federal Reserve Chair Jerome Powell said earlier this month that more reductions in borrowing costs now hinge on further progress in lowering stubbornly high inflation, prompting traders to dial back estimates of how far borrowing costs are likely to fall over the coming year.
Traders expect U.S. President-elect Donald Trump's policies of looser regulation, tax cuts, tariff hikes and tighter immigration to be both pro-growth and inflationary.
In economic news, Chicago-area business activity unexpectedly contracted at an accelerated rate in the month of December, according to a report released by MNI Indicators. MNI Indicators said its Chicago business barometer slid to 36.9 in December from 40.2 in November, with a reading below 50 indicating contraction. Economists had expected the Chicago business barometer to rise to 42.5.
According to a report released by the National Association of Realtors, pending home sales in the U.S. surged by much more than expected in the month of November. NAR said its pending home sales index shot up by 2.2% to 79.0 in November after jumping by 1.8% to 77.3 in October. Economists had expected pending home sales to climb by 0.7%.
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