Gold (XAU/USD) extended its retreat in Asian trade on Monday, falling below the $2,030 mark, as expectations for early Fed rate cuts evaporated after strong jobs data and hawkish signals from Chair Jerome Powell.
The precious metal has slid over 2% after topping out above $2,050 last week, with analysts now pushing back forecasts for the first Fed cut potentially to June.
By 10:00 GTM spot gold was trading at $2,023.45, down 0.80% on the day so far.
Powell said the bank remains firmly committed to taming inflation in an interview aired late Sunday, sending traders scrambling to dial back bets on looser policy even as other central banks hit pause.
Futures now show almost no chance of a March cut, with May also out of favour. The prospect of higher rates for longer reignited dollar gains while also lifting Treasury yields during Asian hours.
Gold struggles when rates rise due to higher opportunity costs, but has seen some safe haven demand amid Middle East tensions.
Gold prices may stage a comeback if geopolitical tensions stoke risk aversion, but simultaneous safe-haven demand for the dollar could constrain the upside. Traders will look to ISM and S&P Global services data later this week, which could provide further directional signals for the precious metal.