Gold prices fell in the European market on Thursday for the first time in three sessions, moving into negative territory under pressure from a stronger US dollar against a basket of major currencies.
The minutes of the Federal Reserve’s latest policy meeting reduced expectations for a rate cut in December, and investors are now awaiting the US jobs report for September, due later today, to reassess those probabilities.
Price Overview
• Gold prices today: spot gold fell by roughly 1.0% to 4,038.94 dollars, down from the opening level of 4,078.80 dollars, after recording a session high of 4,110.17 dollars.
• At Wednesday’s settlement, gold gained 0.3%, marking a second consecutive daily rise as it continued to recover from a two-week low of 3,998.04 dollars per ounce.
The US Dollar
The US dollar index rose 0.2% on Thursday, extending gains for a fifth straight session and hitting a two-week high at 100.32 points, reflecting continued strength in the US currency against a basket of global counterparts.
The rise comes as investors focus on buying the dollar as the most attractive asset at the moment, amid mounting doubts about the likelihood of a Federal Reserve rate cut in December, especially after a series of hawkish remarks from policymakers.
Federal Reserve
Minutes from the FOMC meeting held on October 28–29, released Wednesday in Washington, showed that “many” policymakers opposed cutting the Fed’s benchmark rate during that meeting.
The minutes also indicated that many participants believed the target range would likely remain unchanged through the end of the year based on their economic assessments.
However, some members noted that an additional cut in December “could indeed be appropriate” if the economy performs roughly in line with their expectations before the next meeting.
US Rates
• According to CME’s FedWatch tool, probabilities for a 25-basis-point rate cut in December fell from 48% to 30%, while odds of no change rose from 52% to 70%.
• Investors now await new US jobs data for September — delayed for more than 48 hours due to the longest government shutdown on record — to reassess rate expectations.
Gold Outlook
Kelvin Wong, market analyst for Asia-Pacific at OANDA, said gold is currently falling mainly because expectations of a US rate cut have declined sharply over the past two weeks.
Wong added that, in the short term, this will keep gold below 4,100 dollars. He sees resistance at 4,155 dollars, with the metal potentially trading near 4,000–3,980 dollars.
SPDR Fund
Holdings of the SPDR Gold Trust, the world’s largest gold-backed ETF, rose by 2.29 metric tons on Wednesday to 1,043.72 tons — the highest level in nearly a week.
