Gold futures (GC=F) slipped 0.4% to $5,027.80 a troy ounce, while spot prices lost 0.7% to $5,006.65 at the time of writing.
“Gold has given back some of Friday’s post-CPI gains today due to thinner trading conditions and a lack of fresh upside catalysts,” said Tim Waterer, chief analyst at KCM, referring to the US consumer price inflation data. He also pointed to profit-taking on the day.
US markets are closed for the Presidents’ Day holiday, while markets in China were shut for the Lunar New Year holiday, leading to lighter trading conditions.
Read more: Markets higher as traders look ahead to UK jobs and inflation data
On Friday, Austan Goolsbee, president of the Federal Reserve Bank of Chicago, said interest rates could fall, although he cautioned that services inflation remained elevated.
Investors expect the Federal Reserve to hold rates steady at its next meeting on 18 March.
Non-yielding bullion typically benefits from a lower interest rate environment.
“It will likely require the dollar to resume its downtrend for gold (GC=F) to make a push in the direction of $6,000 before year-end,” Waterer said.
Oil prices edged lower on Monday after the International Energy Agency forecast a record global surplus of 3.7 million barrels a day in 2026, while a softer tone in US rhetoric towards Iran also weighed on the market.
Brent crude (BZ=F) futures retreated 0.2% to $67.60 a barrel, while West Texas Intermediate (CL=F) fell by the exact same 0.2% to $62.75 at the time of writing.
The US and Iran are scheduled to hold a second round of talks in Geneva on Tuesday after resuming negotiations earlier this month aimed at addressing their decades long dispute over Tehran’s nuclear programme and averting a fresh military confrontation.
Read more: UK inflation not falling as fast as expected, says Bank of England rate setter
“With both sides expected to hold firm on their core red lines, expectations are low that a deal can be reached and this is likely to be the calm before the storm,” said Tony Sycamore, market analyst at IG.
Also weighing on prices is the International Energy Agency, after it confirmed projections that the global oil (BZ=F, CL=F) market will record a surplus of more than 3.7 million barrels a day in 2026, which would mark the largest oversupply on record.
Sterling was muted against major peers on Monday, with investors cautious ahead of UK employment and inflation data due this week.
The pound was flat against the dollar at $1.3645 and the same against the euro at €1.1500.