BY COMFORT OGBONNA
Gold prices declined on Monday as thin trading conditions and a firmer U.S. dollar combined to pressure bullion, with major financial markets in the United States and parts of Asia closed for public holidays.
Spot gold fell 0.7% to $5,007.70 per ounce by mid-morning GMT, after dropping more than 1% earlier in the session. U.S. gold futures for April delivery were down 0.4% at $5,027.90 per ounce, reflecting a cautious tone among traders in a low-volume environment
Liquidity was limited as U.S. markets remained shut for Presidents’ Day, while China and several other Asian countries were closed for the Lunar New Year celebrations. With fewer participants active in the market, price movements were more susceptible to currency fluctuations and short-term positioning.
Analysts noted that gold has been consolidating around the psychologically significant $5,000 per ounce level. In holiday-thinned trading, the metal has struggled to break decisively higher or lower, instead moving within a relatively tight range as investors await clearer macroeconomic signals.
The U.S. dollar edged higher during the session, adding downward pressure on bullion. Because gold is priced in dollars, a stronger greenback makes the metal more expensive for holders of other currencies, dampening international demand.
Recent U.S. economic data has provided mixed signals regarding the path of monetary policy from the Federal Reserve. Consumer prices in January rose less than expected, suggesting some moderation in inflationary pressures. However, job growth accelerated unexpectedly during the same period, underscoring continued resilience in the labor market.
Comments from Chicago Federal Reserve President Austan Goolsbee on Friday added nuance to the outlook. While he indicated that interest rates could move lower over time, he emphasized that services inflation remains elevated. Market participants now widely expect the central bank to leave rates unchanged at its next policy meeting scheduled for March 18.
Gold, which does not yield interest, tends to perform better in lower-rate environments because the opportunity cost of holding non-yielding assets declines. As a result, shifting expectations around the Fed’s rate trajectory remain a key driver of sentiment in the precious metals market.
On the geopolitical front, investors are also monitoring developments between Iran and the United States. Reports suggest that Tehran is pursuing a nuclear agreement that could deliver economic benefits for both sides. Any progress on that front could ease geopolitical tensions, potentially reducing safe-haven demand for gold in the near term.
Some analysts have adjusted their price forecasts to reflect the evolving landscape. While earlier projections had pointed toward gold reaching $5,500 per ounce in the medium term, more cautious outlooks now place targets closer to the $5,100–$5,200 range, citing shifting rate expectations and fluid geopolitical conditions.
Other precious metals also traded lower. Spot silver slipped 0.4% to $77.09 per ounce after falling as much as 3% earlier in the session, though it had rallied strongly on Friday. As a metal with significant industrial uses, silver is often more sensitive to economic growth expectations. Strong U.S. employment data has reduced immediate safe-haven demand, weighing more heavily on silver compared to gold.
Meanwhile, spot platinum declined 0.9% to $2,043.60 per ounce, and palladium eased 0.3% to $1,681.34. The broader pullback across precious metals highlights the market’s current focus on interest rate policy, currency strength, and evolving global risk sentiment.
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