Gold Slips Again Amid Firm Dollar, Fading Expectations of Fed Rate Cuts
Spot gold dips for the fourth straight session as the dollar strengthens and traders scale back expectations of a December Fed rate cut.
Mumbai, Nov 18 : Gold prices fell for the fourth consecutive session on Tuesday, pressured by a firm U.S. dollar and fading expectations of an interest rate cut by the Federal Reserve next month.
Spot gold slipped 0.1% to $4,038.43 per ounce at 0104 GMT, while U.S. gold futures (December) dropped 0.9% to $4,037.50.
The dollar held steady after a sharp rise on Monday, making gold more expensive for holders of other currencies and adding downward pressure on bullion.
Market sentiment weakened last week after lawmakers reached a deal to end the longest U.S. government shutdown, during which a lack of economic data limited support for further Fed easing in December.
Traders are now pricing in only a 43% chance of a quarter-point Fed rate cut, down from 50% a week earlier. Fed Vice Chair Philip Jefferson reinforced this outlook on Monday, saying policymakers must “proceed slowly” with any further reductions dampening hopes for a near term cut.
Gold, which does not yield interest, typically benefits in a low-rate or uncertain economic environment.
Investors will watch closely for key U.S. data this week, including the September nonfarm payrolls report due Thursday, for clearer signals on the health of the U.S. economy.
Holdings of the SPDR Gold Trust, the world’s largest gold backed ETF, fell 0.25% to 1,041.43 tonnes on Monday, down from 1,044 tonnes on Friday.
Goldman Sachs noted that central banks likely increased gold purchases in November, continuing a multi-year strategy to diversify reserves amid geopolitical and financial risks.
Among other precious metals, silver eased 0.3% to $50.05 per ounce, platinum was steady at $1,534.70, while palladium slipped 0.6% to $1,385.23.
