Gold declines amid investor caution ahead of US economic data

Gold fell today, but remained stable above $5,000 an ounce, amid investor caution ahead of the release of important data on jobs and inflation in the United States later this week, which would provide indications on the path of interest rates to be decided by the Federal Reserve (the US central bank).

Gold in spot transactions fell 0.7 percent to $5,029.49 per ounce.

The precious metal rose by two percent yesterday, Monday, with the dollar falling to its lowest level in more than a week.

Gold hit a record high of $5,594.82 on January 29.

US gold futures for April fell by 0.5 percent to $5,052.0.

Silver in spot transactions fell 2.1 percent to $81.64, after rising by nearly seven percent in the previous session.

Silver recorded its highest level ever at $121.64 on January 29.

“The cold war and economic competition between the US and China is not going to end anytime soon, probably for years to come… so we are in a situation where gold has some kind of upside advantage,” said Ilya Spivak, head of macroeconomics at Tasty Live.

The dollar suffered losses on Tuesday, while the yen maintained its gains in the wake of Prime Minister Sanae Takaichi’s landslide election victory.

White House economic advisor Kevin Hassett said yesterday, Monday, that job gains in the United States may be lower in the coming months due to slowing labor force growth and rising productivity, which affects the current discussion in the Reserve Board.

Investors expect interest rates to be cut at least twice by 25 basis points this year, with the first cut expected in June. Gold, which does not generate a return, tends to rise with low interest rates.

Data expected this week include December retail sales, CPI and January nonfarm payrolls report.

Platinum fell in spot transactions by 2.1 percent to $2,084.09 per ounce, while palladium fell by 1.7 percent to $1,710.75.