Gold prices eased slightly on Monday as investors awaited key U.S. economic data, including the December nonfarm payrolls report, to gauge the Federal Reserve's interest rate trajectory.
By 4:15 pm AEDT (5:15 am GMT) spot gold eased $5.3 or 0.2% to US$2,634.46.
Upcoming U.S. jobs data and other economic indicators, such as the ISM Services PMI, are expected to be pivotal for determining whether gold can break out of its current trading range.
The December jobs report, due Friday, will offer further insight into the Federal Reserve's rate policy after it signalled fewer rate cuts for 2025 in response to persistent inflation pressures. Additional reports, including ADP hiring data, job openings, and the Fed's meeting minutes, will also provide context.
Gold tends to benefit in low-interest-rate environments and acts as a hedge against inflation and geopolitical risks. However, President-elect Donald Trump's return to office on January 20, along with proposed tariffs and protectionist policies, could amplify inflationary pressures, potentially influencing the Fed to slow its pace of rate cuts.