Gold Up but Set for Monthly Drop Ahead of Central Bank Policy Decisions

Gold was up on Monday morning in Asia, but the yellow metal was set for its biggest monthly drop since September 2022. Investors now await several central bank policy decisions that are due throughout the week.

Gold futures edged up 0.20% to $1,788.40 by 10:28 PM ET (13:28 AM GMT). They remained near the previous session’s $1,779.20 mark, the lowest since Dec. 16, 2021. It has also fallen more than 2% so far in January.

The dollar, which usually moves inversely to gold, inched down on Monday but remained close to its 18-month high hit during the previous week.

The U.S. Federal Reserve signaled interest rate hikes from March 2022 in its latest policy decision, handed down during the previous week. Investors now await policy decisions from the Reserve Bank of Australia, due on Tuesday. The European Central Bank and the Bank of England will also hand down their policy decision on Thursday.

Elsewhere in Asia Pacific, China released data on Sunday that showed the manufacturing purchasing managers index (PMI) was 50.1, and the non-manufacturing PMI was 51.1, in January.

In neighboring Japan, data released earlier in the day showed that industrial production contracted 1% month-on-month, while retail sales grew 1.4% year-on-year, in December.

On the demand side, top Asian hubs such as China recorded firm demand for physical gold during the previous week as shoppers prepared for the Lunar New Year holiday. In India, buyers delayed purchases ahead of the country’s Union Budget, which will be handed down on Feb. 1.

In other precious metals, silver was down 0.3%, while platinum inched up 0.1%. Palladium fell 0.5% but was set for its best monthly gain since February 2008.