Gold prices tick lower; growth concerns start weighing on white metals

By Arundhati Sarkar

(Reuters) - Gold prices ticked lower on Monday as investors positioned for U.S. economic data this week that could influence the Federal Reserve's future policy, with a softer dollar cushioning further losses in bullion.

Spot gold inched 0.1% lower to $1,925.54 per ounce by 1133 GMT. It climbed to its highest since April 2022 on Friday.

U.S. gold futures were little changed at $1,927.00.

The dollar index was down 0.1%, making greenback-priced gold attractive for buyers holding other currencies. [USD/]

"Gold still looking well supported despite the pullback from last week's peaks, and currently has support at $1,896 and could well gain further momentum once next week's central bank meetings are out of the way," said Michael Hewson, chief markets analyst at CMC Markets.

"Further comments at the end of last week from Fed Governor Christopher Waller that he supported another step down to 25 basis points (bps) has added to the supportive narrative for gold and a weaker U.S. dollar."

Investors will be scanning the U.S. fourth quarter GDP growth estimates on Thursday and U.S. personal spending data on Friday, before the Jan. 31-Feb. 1 policy meeting.

Zero-yield bullion tends to do well in a lower interest rate environment.

The current narrative of the Fed having to reduce or stop rate hikes in the next few months is lending support to gold, said Clifford Bennett, chief economist at ACY Securities.

The Fed raised rates by 50 bps last month after delivering four straight 75-bp hikes. [FEDWATCH]

Among other precious metals, spot silver dropped 1% to $23.7204 per ounce, platinum eased 0.2% to $1,041.50, and palladium fell 0.5% to $1,718.19.

Growth concerns are weighing on the white metals, which have a higher industrial use than gold, UBS analyst Giovanni Staunovo said.

Overall, trading was muted by the Lunar New Year holiday observed in most Asian hubs.

 

(Reporting by Arundhati Sarkar and Ashitha Shivaprasad in Bengaluru; editing by Jason Neely and Louise Heavens)