Gold edges lower on stronger dollar

Gold prices declined on Monday, dragged down by a stronger dollar, with the latter underpinned by higher US yields and profit taking ahead of major economic events.

After hitting multi-year lows, the US dollar managed to recover some ground over the last sessions, while the yield on 10-year US Treasury notes reached its highest level since April 2014. Against this backdrop, the yellow metal spot fell to a low of $1,337 an ounce and at time of writing, XAU/USD is trading at $1,340/oz, down 0.81% on the day.

Investors are booking some profits ahead of the FOMC policy meeting on Wednesday and January nonfarm payrolls due on Friday.

Last week, spot reached a 17-month high of $1,366/oz driven by a weaker greenback, which was pressured by comments from Treasury Secretary Steven Mnuchin who said a “weak dollar was good for trade”.