Bengaluru – Gold prices โdipped belowโ $4,000 per ounceโฃ on Tuesday, pressured by a strengthening U.S. โdollar and diminished expectations for a further Federal Reserve interest rate โcut in December. Easing trade tensions between โthe U.S. and China also contributed to dampened demand forโฃ the โฃsafe-haven asset.
Spot gold was down 0.2% atโฃ $3,992.23/oz by 3.43am GMT, while โฃU.S. gold โfuturesโข for December delivery fell 0.3% to $4,001.40/oz.
The dollar held steadyโ near a three-month high as differing opinions within the Federal Reserve led traders to scale back bets on additional rate reductions. โThe Fedโฃ last week implemented its second rate cut of the year, but Chairman jerome Powell indicated that another cut wasn’tโ guaranteed.
“The stronger dollar โคis acting as a thorn in the side of gold, with traders recalculating the likelihoodโฃ of another โคrate cut arriving by year-end,” said KCM Trade โChief Market Analystโ Tim Waterer.
According to CME’s FedWatch Tool, the probability of a December rate cut has decreased to 65% from over โข90% prior to Powell’s โcomments.
federal Reserve officials โcontinued to voice contrasting views on โthe economy Monday, aโ debate expected to intensify leading up to the December policy meeting. โThe release of key economic data, including figures from the Bureau of Labor Statistics, is currently delayed due to the โongoing federalโฃ government shutdown.
Gold, a non-yielding asset, typically performs well in low-interest-rate environments andโ during periods โof economic uncertainty. Investors are โnow focused on upcoming economic indicators – the ADP US employment data due Wednesday and ISM PMIs later this week – for โฃsignals regarding potential rate cuts.
“If we โคsee another bleak-looking ADPโค print, thatโค may give gold aโ foothold to start tracking higher again,” Waterer added.
Despite theโข recent pullback, bullion has still โขgained 53% this year, though it has fallen โขmore than 8% โฃfrom its record high on October 20.
U.S. President Donald Trump announced last week an agreement to reduce tariffs on China โคin exchange forโ concessions from โBeijing.
Elsewhere, spotโ silver edged up 0.1% to $48.12/oz, platinum rose 0.1% to โ$1,566.60, and palladium fell 1% to $1,430.31.
Reuters