Gold prices fall on a firm dollar as spotlight moves to US CPI data

Gold prices declined on Monday pressured by a firm US dollar, as investors look ahead to several major central bank meetings and US inflation data this week for further clarity on the interest rate path.

Spot gold was down 0.5% at $1,993.49 per ounce, as of 0934 GMT. US gold futures eased 0.3% to $2,009.20.

The dollar rose 0.1% against its rivals, making gold more expensive for other currency holders.

"Bullion could easily be restored back above the $2,000 level, especially if this week's US CPI print comes in below market expectations, and if the Fed fails to push back on market expectations for US rate cuts," said Exinity Chief Market Analyst Han Tan.

US non-farm payrolls increased by 199,000 last month, above economists' expectations of 180,000. The report reined in hopes that the Federal Reserve could cut interest rates as soon as March.

In the limelight now, is the November US consumer price report due on Tuesday, which could offer more rate cut clues ahead of the Fed's statement and Chair Jerome Powell's comments on Wednesday.

The Fed is widely expected to leave rates unchanged at 5.25%-5.50% this week. The European Central Bank, Bank of England, Norges Bank, and the Swiss National Bank will also conduct policy meetings on Thursday.

Traders are pricing in a 44% chance of a rate cut in March, according to the CME FedWatch tool. Lower interest rates tend to support non-interest-bearing bullion.

Meanwhile, COMEX gold speculators lowered their net long position by 11,895 contracts to 132,515 in the week ended Dec. 5. [CFTC/]

"A further bearish factor (for gold) came in the form of the US dollar, which strengthened against other major currencies in the first few days of December," Kinesis Money said in a note.

Spot silver lost 0.1% to $22.94 per ounce, while platinum rose 0.5% to $918.95. Palladium fell 0.6% to $941.36 per ounce.