Gold prices slipped in early Asian trading on Monday, weighed down by renewed interest in riskier markets after traders sharply increased their expectations for a Federal Reserve rate cut in December. A rebound in global equities and optimism around diplomatic efforts to broker a Russia–Ukraine ceasefire also drew capital away from traditional safe havens.
Still, persistent worries about strained public finances worldwide and ongoing tensions between China and Japan kept gold comfortably above $4,000 an ounce. The looming release of several major U.S. economic indicators this week added a layer of caution, helping limit the metal’s downside.
By 01:07 ET (06:07 GMT), spot gold was down 0.3% at $4,052.53/oz, while December gold futures retreated 0.7% to $4,086.10/oz.
Rate-Cut Bets Surge, Leaving Gold Behind
Momentum in risk markets strengthened after New York Fed chief John Williams reiterated that the central bank still had scope to trim rates as early as next month. Williams highlighted potential vulnerabilities in the labor market and noted that upward inflation pressures had moderated.
According to the CME FedWatch Tool, traders now assign a 67.3% likelihood of a 25-basis-point cut at the Fed’s December 9–10 meeting—up sharply from 39.8% just a week ago.
Other precious metals were mixed: spot platinum climbed 1.4% to $1,537.65/oz, while spot silver drifted slightly lower to $49.92385/oz. Gold’s losses were temperate thanks to investors still pricing in easier U.S. monetary policy ahead.
Heavy U.S. Data Calendar Could Set the Tone
Markets are now bracing for a flood of U.S. economic data covering September, delayed due to the extended federal government shutdown. These reports are expected to offer analysts a clearer picture of the economy heading into the final Fed meeting of the year.
Monday brings industrial production and capacity utilization data, followed Tuesday by the producer price index and retail sales numbers.
A packed Wednesday will deliver updates on building permits, durable goods orders, weekly jobless claims, and the crucial third-quarter GDP reading. The PCE price index, the Fed’s preferred measure of inflation, will also be released that day.
However, with October data missing, policymakers will still be assessing the economic backdrop with significant blind spots. This lack of clarity has contributed to divisions within the Fed over whether additional rate cuts are needed in the near term, keeping earlier expectations for a “pause” very much alive.
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