Base metals pulled back, with investors looking ahead to Friday’s U.S. nonfarm payrolls figure and how it will affect Fed policy.

“Weaker job numbers on Friday would push the dollar lower and lever our commodity markets higher,” Peak Trading Research said.

Gold prices softened, having spiked during the Asian trading hours and after hitting a new record high on Friday.

“Markets are pricing in several key interest rate cuts for next year–not only in the U.S. but also in Europe,” Heraeus said.

“What’s next for gold: If signs of low interest rates become more evident, gold should continue to soar next year.”

Oanda said gold’s medium-term uptrend is intact, but a minor pullback is possible, based on technical analysis.

Monday’s swift rally has resulted in gold becoming extremely overbought, where the daily relative strength index momentum indicator is at 76.70, the highest since the medium-term uptrend began on Oct. 6, Oanda said.

On the hourly chart, gold has retreated from upper boundary of its ascending channel, which now acts as near-term resistance at $2,126/oz. Also, the hourly RSI momentum indicator has just exited from overbought territory, which increases risk of a minor pullback, adds Wong, pegging support at $2,067/oz.

UBS has downgraded lithium prices, cutting its medium-term price forecasts for the battery material by 23%-45%.

A surge in dealmaking among metals and mining companies is likely to continue into 2024, according to BMI. It sees demand for M&A supported by global energy-transition tailwinds and easing inflation pressures.

Deal activity has been climbing since 2020 and much of it has recently centered around energy-transition minerals, including copper and lithium, it notes. Gold-industry consolidation is also ongoing.

“While securing supply to transition metals, major mining companies will also continue to focus on reducing their exposure to coal assets,” BMI said.