Gold falls to one-week low ahead of US employment report; silver down 1.2%

As of 9:37 a.m. ET (1337 GMT), spot gold was down around 0.1%, trading at $2,501.20 per ounce, after touching its lowest price since August 23 earlier in the day.

Gold price today: Spot gold was down around 0.1%, trading at $2,501.20 per ounce.

Gold prices sank to their lowest level in almost a week on Monday as the U.S. currency rallied. Investors are now shifting their focus to a series of economic data releases scheduled this week for signals on the size of rate reduction the Federal Reserve would take at its September meeting.

As of 9:37 a.m. ET (1337 GMT), spot gold was down around 0.1%, trading at $2,501.20 per ounce, after touching its lowest price since August 23 earlier in the day.

One of the key drivers of the gold price over the last two months has been the dollar's near 5% decline versus a basket of major currencies, which partly explains the 8.5% increase in the ounce. When the DXY hits the lower end of its trading range in early 2023, we observe that it is making an attempt to turn back upward. All things considered, these signals suggest that resistance will likely be broken in the near future, leading to a resurgence of historical highs. This could be followed by a medium- or even long-term reversal in the dynamics of the gold price, according to senior market analyst at FxPro Alex Kuptsikevich.

What influences the price of gold?

This week, the ISM surveys, JOLTS job openings, ADP employment, and the non-farm payrolls report are among the upcoming U.S. economic data releases.

At its meeting on September 17–18, the Federal Reserve is widely expected by the market to lower interest rates, which would be the first rate reduction of this policy cycle.

Investors currently see a 69% chance of a 25 basis point cut and a 31% chance of a 50 basis point cut in September, according to the CME FedWatch tool. The opportunity cost of storing non-yielding assets, such as gold, is decreased by lower interest rates.

For holders of other currencies, gold became more costly as the dollar remained close to a two-week high set earlier in the session.

At $28.51 an ounce, spot silver fell 1.2%, to its lowest level in more than two weeks.

Palladium increased by 0.8% to $973.25, while platinum increased by 0.2% to $927.55.