Gold prices slipped in Asian trading on Friday as expectations for a December interest rate cut by the Federal Reserve continued to fade. A stronger dollar pressured commodity prices broadly, weighing on gold and other non-yielding assets.
However, losses were limited by ongoing turbulence in global technology stocks. Concerns over inflated valuations pushed some investors toward safe-haven assets. Fiscal worries in Japan also helped support gold.
Spot gold fell 0.6% to $4,053.09 an ounce, while December gold futures dipped 0.3% to $4,049.76 by 00:38 ET (05:38 GMT). Spot prices are set for a weekly loss of around 0.8%, reversing last week’s 2% rise.
Gold Pressured as December Rate-Cut Bets Cool
Gold remained under pressure as the dollar strengthened. Investors increasingly expect the Federal Reserve to keep interest rates unchanged in December.
Stronger-than-expected September nonfarm payrolls reinforced the view that the labor market remains resilient. Combined with sticky inflation, this reduces the urgency for the Fed to cut rates.
According to the CME FedWatch tool, traders now assign a 28.5% chance of a 25-basis-point rate cut in December. This is higher than yesterday’s reading but well below last week’s 45.4%.
Higher-for-longer rates reduce the appeal of non-yielding assets like gold. A firm dollar also makes dollar-priced commodities more expensive for buyers using other currencies.
More clues on the U.S. economy are expected later Friday with several Fed officials scheduled to speak. November PMI data will also be released. Key U.S. economic reports for September and October are due next week after delays caused by the extended government shutdown.
Other precious metals also declined. Spot platinum slipped 0.6% to $1,507.78, while spot silver fell 2.1% to $49.5955.
Tech Rout and Fiscal Worries Support Haven Demand
Gold’s decline was cushioned by persistent safe-haven demand, driven largely by a sharp sell-off in global technology stocks. The downturn deepened through Thursday and Friday, with strong earnings from Nvidia failing to ease concerns.
Investors were unsettled by Nvidia’s rising inventory levels and signs of circular financing tied to its investments in major customers. The tech giant has been central to the explosive rise in AI-related valuations, but fears of an AI bubble have grown in recent weeks.
Fiscal concerns also added support for gold. Japan approved a ¥21.3 trillion ($135 billion) stimulus package on Friday, prompting fresh questions about how the government will fund its expanding spending plans. As a result, long-term Japanese bond yields surged to multi-decade highs this week.
