Investing.com - Gold prices dipped on Monday with a wary eye on events in Yemen and as signals from the Federal Reserve continue to suggest a rate hike later rather than sooner this year.
On the Comex division of the New York Mercantile Exchange, gold futures for June delivery dipped 0.28% to $1,197.20 a troy ounce.
Elsewhere on the Comex, silver futures for May delivery 0.17% to $16.918 a troy ounce.
Also in metals trading, copper for May delivery slumped 0.43% to to $2.752 a pound.
Last week, gold declined for the first time in eight sessions on Friday, as a rebound in the U.S. dollar prompted investors to lock in gains from a recent rally after Saudi Arabia launched air strikes in Yemen, while the U.S. dollar weakened.
Gold traders have been monitoring the direction of the dollar in recent months to gauge the appeal of the precious metal. Prices often move inversely to the U.S. dollar, as gold becomes less expensive for buyers using other currencies.
The dollar showed little reaction after Federal Reserve Chair Janet Yellen struck a cautious note on interest rates. In a speech, the Fed chief said a rate hike may be warranted later this year, but added that weakening inflation pressures could force the Fed to delay.
The speech echoed the Fed’s latest policy statement, released on March 18, which indicated that it may raise interest rates more gradually than markets had expected.
Meanwhile, the Commerce Department reported Friday that the U.S. economy expanded at an annual rate of 2.2% in the fourth quarter, unchanged from the preliminary estimate and below economists’ forecasts for an upward revision to 2.4%.
Another report showed that the final reading of the University of Michigan’s consumer sentiment index ticked down to 93.0 this month from a final reading of 95.4 in February.
A delay in raising interest rates would be seen as bullish for gold, as it decreases the relative cost of holding on to the metal, which doesn't offer investors any similar guaranteed payout.
In the week ahead, investors will be turning their attention to Friday’s U.S. nonfarm payrolls report for further indications on the strength of the recovery in the labor market.
On Monday, the U.S. is to release reports on personal spending and pending home sales.