PRECIOUS-Rising Treasury yields dampen gold prices as traders look to US data

(Updates with mid-session trading)

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US monthly payrolls report due on Friday

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Goldman pushes back $3,000 per troy ounce gold forecast to 2026

By Anushree Mukherjee

Jan 6 (Reuters) -

Gold prices retreated on Monday as U.S. Treasury yields edged up, while investors' attention turned to economic data for clues on the Federal Reserve's interest rate trajectory in 2025.

Spot gold fell 0.6% to $2,624.20 per ounce by 8:50 a.m. EST (1350 GMT). U.S. gold futures lost 0.8% to $2,633.80.

"Gold is trading with a slightly weak momentum as yields are trading higher and traders look ahead to a series of U.S. economic data releases this week to assess the Fed's stance on rate cuts," said Jigar Trivedi, senior analyst at Reliance Securities. The release of the monthly U.S. jobs report on Friday will help to shape expectations of the Fed's rate path this year after the U.S. central bank rattled markets last month by reducing the number of projected rate cuts this year given that inflation remains well above the 2% target.

Market watchers are also looking to the release of job openings data on Tuesday, ADP employment numbers and the minutes from the Fed's most recent policy meeting on Wednesday for further insights.

Goldman Sachs pushed back its gold price forecast of $3,000 per troy ounce to the second quarter of 2026 from December 2025, citing fewer Fed rate cuts.

"Opposing forces - lower speculative demand and structurally higher central bank buying - have effectively offset each other, keeping gold prices range-bound over the past few months," Goldman said, adding that ETF demand has also grown less than expected. U.S. President-elect Donald Trump returns to office on Jan. 20 and his proposed tariffs and protectionist policies are expected to drive inflation higher.

Bullion is considered a hedge against inflation and uncertainty, but high rates reduce the non-yielding asset's appeal.

"We also expect de-escalation in the geopolitical war in the Middle East, hence the safe-haven buying may not emerge," Reliance Securities' Trivedi added.

Spot silver gained 0.8% to $29.84 per ounce, platinum eased 0.2% to $936.05, and palladium added 0.4% to $926.25.

(Reporting by Anushree Mukherjee in Bengaluru, additional reporting by Swati Verma; Editing by Kirsten Donovan, Barbara Lewis and Paul Simao)