(adds comment and updates prices)
* Gold should move towards $1,700/ounce in 2022 – Analyst
* US retail sales figures due Tuesday
November 15 (Businesshala) – Gold prices fell on Monday, slipping from a more than five-month peak in the previous session, as cautious investors assessed whether rising inflation would prompt a more aggressive response by central banks.
Spot gold fell 0.3% to $1,857.71 an ounce as of 0650 GMT, while US gold futures fell 0.5% to $1,859.80.
“Unless it breaks above $1,875-$1,880, gold should be held above a stronger dollar, higher short-term US Treasury yields and a potential move into longer-term yields if the Fed begins to signal that They are going to raise rates very soon, said Stephen Innes, managing partner at SPI Asset Management.
The dollar index fell 0.1%, but was not far from a 16-month high on Friday. A stronger dollar increases the price of gold for buyers holding other currencies.
Minneapolis Federal Reserve Bank President Neil Kashkari said on Sunday that he expects higher inflation in the next few months, but warned that the US central bank should not overreact to increased inflation because it is likely to be temporary.
“Inflation data has given a boost to gold. However, prices could drop as low as $1,700 during 2022 as rising inflation will mean that central banks accelerate the pace of monetary tightening,” said Warren Patterson, Head of Commodity Strategy at ING.
A hike in interest rates reduces the appeal of non-interest bearing gold as it increases the opportunity cost of the metal.
Harish V, head of commodity research at Geojit Financial Services in Kochi, India, said the Fed is unlikely to be aggressively short, given only a gradual recovery in the labor market, backing gold.
Market participants await Tuesday’s US retail sales data after consumer sentiment hit its lowest level in a decade.
Spot silver fell 0.9% to $25.05 an ounce. Platinum fell 0.6% to $1,076.59 and palladium fell 1% to $2,087.62. (Reporting by Nakul Iyer and Sehar Darren in Bengaluru; Editing by Uttaresh V, Rashmi Aich and Shailesh Kuber)