Gold prices weakened again on Tuesday during Asian trading hours, pressured by a firmer U.S. dollar as investors pulled back from earlier bets on a Federal Reserve rate cut next month. The shift in sentiment, combined with anticipation surrounding this week’s September nonfarm payrolls release, added to headwinds for precious metals.
Spot gold slipped 0.7% to $4,019.19 per ounce, while December futures dropped 1.4% to $4,018.89. The metal has now erased most of last week’s gains.
Rate-Cut Optimism Fades as Focus Turns to Labor Data
The decline came as the market dialed down the likelihood of a December policy easing.
The extended government shutdown delayed a raft of economic reports, leaving traders worried the Fed may be forced to make decisions with incomplete data.
Thursday’s payrolls release is expected to provide the final major reading on hiring conditions before the Fed meets on December 10–11.
Futures markets now show a 42.4% chance of a 25-basis-point trim and a 57.6% probability of rates staying unchanged.
A higher-for-longer rate environment reinforces the appeal of Treasuries, diminishing the relative attractiveness of gold.
Dollar Strength Adds Pressure Across Metals
The U.S. dollar has rebounded sharply in recent days, weighing not only on gold but on the broader metals complex.
Platinum and silver each slipped 0.7%, and LME copper futures lost 0.8%, partially unwinding last week’s strength.
Dollar demand has been buoyed by expectations that U.S. interest rates will remain elevated and by mounting fiscal concerns in major economies — Japan in particular.
A surge in long-term Japanese bond yields sent the yen tumbling and pushed more investors into the greenback.
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