Gold falls to its lowest levels in a week despite dollar losses... What is the reason?

Gold prices witnessed a sharp decline during trading on Monday, as spot gold contracts erased their early session gains and continued to deepen their losses from the previous Friday’s session, thus recording their lowest levels in about a week.

Current Gold Prices

In terms of trading, spot gold prices fell by approximately 0.50% to record $2,624.25 per ounce, while February futures gold contracts decreased by 0.99% to record $2,636.12 per ounce.

What Caused Gold to Suffer These Losses Today?

Gold prices declined today despite the losses experienced by the US dollar. The dollar index – which measures the performance of the US currency against a basket of 6 major currencies – dropped by 0.64% to 107.92 points, as investors anticipated a week full of important economic data and announcements from the US Federal Reserve.

The US Federal Reserve is set to release the minutes of the Federal Open Market Committee's previous meeting from December next Wednesday, just days before the US employment data for December is expected to be released, which is forecasted to come in lower than the previous month at only 24,500 jobs.

On the other hand, concerns among investors regarding the potential impact of Trump’s tariffs, which may be imposed later this month, continued to bolster demand for US Treasury bonds as a safe haven, significantly boosting Treasury yields. The yields on the benchmark 10-year US Treasury surged by 0.6%, reaching 4.62% today, exerting pressure on gold prices as investors opted for US bonds instead.

The losses in gold today coincided with the US investment giant Goldman Sachs postponing its forecast for gold prices to reach $3,000 per ounce to the second quarter of 2026, after previously expecting it to hit that level in December 2025. The bank cited in its new forecast lower expected cuts in interest rates from the US Federal Reserve.