Gold prices slipped in Asian trading on Monday as risk appetite improved, driven by a sharp rise in expectations for a December interest rate cut by the U.S. Federal Reserve.
Stronger demand for equities and other risk-focused assets reduced interest in gold. Additional reports that the U.S. was pushing for a Russia-Ukraine ceasefire also weighed on safe-haven demand.
Even so, concerns about global fiscal stability and a diplomatic dispute between China and Japan helped keep gold above the $4,000 level. Anticipation of several major U.S. economic reports this week, along with expectations of lower rates, also limited the downside.
Spot gold declined 0.3% to $4,052.53 per ounce, while December gold futures fell 0.7% to $4,086.10 per ounce by 01:07 ET (06:07 GMT).
Gold lags as rate-cut bets rise
Market expectations for a December rate cut increased sharply after New York Fed Governor John Williams suggested the central bank still had room to ease policy next month.
He pointed to emerging risks in the labor market and noted that upside inflation pressures had eased.
Traders were pricing in a 67.3% probability of a 25-basis-point cut at the Fed’s December 9–10 meeting, up from 39.8% a week earlier, according to the CME FedWatch Tool.
Other precious metals moved higher on Monday. Spot platinum rose 1.4% to $1,537.65 per ounce, while spot silver edged slightly lower to $49.92385 per ounce. Gold’s losses were tempered by expectations of falling U.S. interest rates.
U.S. economic data release schedule
Attention this week is focused on several delayed economic reports for September, which are expected to offer clearer insight into the health of the U.S. economy.
Industrial production and capacity utilization data are due Monday, followed by producer price index and retail sales figures on Tuesday.
Reports on building permits, durable goods, jobless claims, and most importantly, third-quarter GDP will arrive Wednesday.
The PCE price index — the Fed’s preferred inflation metric — is also scheduled for Wednesday.
These releases, postponed due to the recent government shutdown, may help shape expectations ahead of December. However, the lack of October data still leaves policymakers without a complete picture heading into their final meeting of the year.
Growing divisions within the Fed have also raised doubts over whether further cuts will be approved.
