Gold prices slipped in Asian trading on Thursday, easing after two days of gains as investors reduced expectations for a December interest rate cut by the Federal Reserve. The metal also faced pressure from a rebound in global equity markets, driven by strong earnings from Nvidia Corp.
Attention shifted toward the upcoming U.S. nonfarm payrolls report, which is expected to provide fresh insight into the state of the labor market.
Concerns over rising fiscal spending in major economies offered some support to gold. Japanese government bond yields continued to climb, while a growing diplomatic dispute between China and Japan also added to safe-haven demand.
Spot gold fell 0.2% to $4,070.27 per ounce, while December gold futures declined 0.3% to $4,069.09 per ounce by 00:15 ET (05:15 GMT).
Gold Rally Pauses as Rate Cut Bets Decline
Gold’s recent rally stalled after the metal gained more than 1% over the previous two sessions. Confidence in a December rate cut weakened further on Wednesday, following the release of minutes from the Fed’s October meeting. The minutes showed policymakers were increasingly divided over whether additional cuts were appropriate.
Market pricing now reflects just a 21.5% chance of a 25-basis-point cut at the December 10–11 meeting—down sharply from 42.4% only a day earlier, according to the CME FedWatch tool.
The Fed faces limited visibility ahead of the meeting due to delays in economic data caused by the prolonged government shutdown. This lack of clarity makes a cautious pause more likely.
Higher U.S. interest rates tend to weigh on gold, which offers no yield.
Other precious metals recovered on Thursday after losses in the prior session. Spot platinum rose 0.8% to $1,560.13 per ounce, while spot silver held steady at $51.3415 per ounce.
All Eyes on U.S. Payrolls Data
Markets are now awaiting the release of the long-delayed U.S. nonfarm payrolls data for September. Although the report is unlikely to influence the Fed’s December decision, it will still provide an important snapshot of labor-market conditions.
The release was postponed due to the government shutdown, and officials have indicated that October’s payrolls data may never be published.
Recent private-sector surveys and this week’s jobless claims data suggest the U.S. labor market is steadily weakening. This trend could eventually push the Fed toward a rate cut, as stabilizing employment remains one of its core mandates.
However, persistently high inflation is expected to limit how quickly or aggressively the Fed can ease policy.
