Gold Starts the Week with a Decline Amid Dollar Fluctuations
Gold began the new week with a decline after experiencing a slight recovery following a sharp drop at the beginning of last week.
Starting the week with a drop of over 1%, gold futures fell to $2,620 before partially rebounding to around $2,640. This decline occurred as the dollar started the week strongly and investors engaged in profit-taking. Market participants are focusing on upcoming economic data in search of clues regarding the Fed's next moves on interest rates.
Key data to be released this week includes employment figures, wage increases in the private sector, activities in the services and manufacturing sectors, and the unemployment rate. Many Fed officials, including Chairman Jerome Powell, will also be speaking this week. Last week, data indicating that the U.S. had stalled in its efforts to reduce inflation suggested that the Fed's interest rate cut cycle would progress at a slower pace. Expectations for rate cuts are decreasing. The market currently assesses the possibility of a 25 basis point rate cut in the Fed's meeting this month at 65%. For 2025, only two rate cuts are being priced in. Meanwhile, as geopolitical risks rise, mutual accusations between parties continue despite the ongoing ceasefire between Israel and Iran-backed Hezbollah amidst the events in Syria.
Analysts believe that rising interest rates negatively impact gold demand. However, safe-haven demand is limiting gold price declines due to geopolitical tensions. The strong performance of the dollar in European markets continues to pressure gold demand. The market is expected to focus on the Fed's December meeting and the U.S. economic data to be released this week.
In the precious metals market, while gold futures are hovering around $2,640, they finished November with a decline exceeding 3%, marking the worst monthly performance for gold since September 2023.
Meanwhile, other precious metals are also experiencing declines. Silver has lost 0.7%, trading at $30.39 per ounce, platinum has decreased by 0.2% to $944.20, and palladium has fallen by 0.3% to $975.44. According to statements made, Trump indicated over the weekend that BRICS countries should not develop a new currency or support any currency to replace the U.S. dollar, or they would face a 100% tariff. This statement supported the dollar and triggered a pullback in precious metals.
Domestically, gram gold is continuing its decline with a decrease close to half a point, finding buyers at 2,948 TL.