Gold falls on stronger US dollar as investors trim rate-cut bets
The US central bank cut interest rates on Wednesday by a quarter of a percentage point for the second time this year
[BENGALURU] Gold prices slipped on Monday (Nov 3), pressured by a stronger US dollar as investors dialled back bets for further US Federal Reserve rate cuts following chair Jerome Powell’s hawkish remarks last week, while easing US-China trade tensions also weighed on bullion.
Spot gold was down 0.8 per cent at US$3,968.76 per ounce, as at 8.16 am.
US gold futures for December delivery slipped 0.5 per cent to US$3,978.30 per ounce.
The US dollar held steady near three-month highs reached last week, making greenback-priced bullion more expensive for other currency holders.
The US central bank cut interest rates on Wednesday by a quarter of a percentage point for the second time this year, taking the benchmark overnight rate to a target range of 3.75 to 4 per cent.
Non-yielding gold thrives in a low-interest-rate environment and during economic uncertainties.
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Traders now see a 71 per cent chance that the Fed will cut rates again in December, down from over 90 per cent before Powell’s remarks, as per CME’s FedWatch Tool.
US President Donald Trump said on Thursday that he had agreed with Chinese President Xi Jinping to trim tariffs on China in exchange for Beijing cracking down on the illicit fentanyl trade, resuming US soybean purchases and keeping rare earths exports flowing.
Parts of the US economy, particularly housing, may already be in recession because of high interest rates, Treasury Secretary Scott Bessent said on Sunday, repeating his call for the Fed to accelerate rate cuts.
Gold has gained 51 per cent year-to-date, supported by geopolitical and economic uncertainties, US rate-cut bets and sustained central bank buying.
Bullion prices hit a record high of US$4,381.21 on Oct 20, but have fallen more than 10 per cent since then, in part due to easing trade tensions.
Meanwhile, SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings fell 0.11 per cent to 1,039.20 tonnes on Friday from 1,040.35 tonnes on Thursday.
Elsewhere, spot silver fell 0.5 per cent to US$48.41 per ounce, platinum was down 0.1 per cent at US$1,566.40 and palladium lost 0.6 per cent to US$1,424.88. REUTERS
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