Gold Prices Fall from Two-Week High Amid Dollar Strengthening

SadaNews Economy - Gold prices recorded a slight decline today, Monday, as the dollar gradually recovered, while growing expectations of a U.S. interest rate cut limited the sharp drop in the precious metal after U.S. Federal Reserve Chairman Jerome Powell hinted at the possibility of a rate cut.

Gold fell in spot transactions by 0.1% to record $3,365.82 per ounce, after reaching its highest level since August 11 on Friday. U.S. gold futures for December delivery also fell by 0.2% to $3,410.20.

The dollar index rose by 0.2% against a basket of competing currencies after it had fallen to its lowest levels in four weeks, making gold less attractive to buyers outside the United States.

Powell indicated on Friday the possibility of a rate cut at the Federal Reserve's meeting next month, noting that risks to the labor market are increasing; however, he emphasized that inflation still poses a threat and that the decision has not yet been made.

Markets are currently pricing in an anticipated rate cut of 25 basis points at the scheduled monetary policy meeting on September 17, with a total expected reduction of up to 48 basis points by the end of the year, according to the "FedWatch" tool from the CME Group.

Gold typically benefits from expectations of a rate cut, as it reduces the opportunity cost of holding a non-yielding precious metal.

In other precious metals, silver fell in spot transactions by 0.2% to $38.09 per ounce, platinum dropped by 0.3% to $1,356.95, while palladium fell by 0.6% to record $1,119.67.