Gold Dips Amidst Market Holidays and Profit-Taking

Gold prices dropped on Monday, pressured by thin trading volumes as both U.S. and Chinese markets remained shut due to local holidays. The dip followed a 2.5% surge in the last session, prompting some traders to book profits.

Spot gold fell 1.1% to $4,988.04 per ounce, while U.S. gold futures for April lost 0.8% to $5,006.60 per ounce. Tim Waterer, chief analyst at KCM, noted that thinner trading conditions and a lack of fresh catalysts contributed to the decline, alongside profit-taking. Key U.S. and Chinese markets were closed for Presidents' Day and the Lunar New Year, respectively.

The recent Consumer Price Index showed a 0.2% rise in January, while economists had expected 0.3%. Market participants anticipate the Federal Reserve to maintain interest rates at the upcoming March meeting, with potential rate cuts later in the year. Non-yielding bullion excels in low-interest environments, potentially aiming for $6,000 by year-end. Meanwhile, geopolitical tensions between the U.S. and Iran remain a concern.