Gold prices erased earlier gains on Monday, with the precious metal trading lower at $1,975.50 per ounce by late morning. The retreat came as investors exercised caution on Friday and took profits after gold failed to breach the $2,000 level.
Attention now turns to the minutes of the US Federal Reserve’s October meeting, due on Tuesday, for clues on interest rate policy. Markets expect rates to remain higher for longer to combat inflation, which is negative for gold as it raises the opportunity cost of holding non-yielding bullion.
While the Fed is seen pausing rate hikes for now, traders are pricing in potential cuts only in 2024. The prospect of still-high rates is expected to cap major rallies in gold prices over the coming months.