Gold prices edged lower in Asian trading on Monday, extending last week’s decline as markets continued to scale back expectations of a Federal Reserve rate cut in December.
A firmer U.S. dollar added pressure, while broader risk aversion tied to delayed policy easing and lingering economic uncertainty offered little support for the metal.
Spot gold dipped 0.6% to $4,053.84 an ounce by 00:33 ET (05:33 GMT), while December gold futures slid 0.9% to $4,055.91 per ounce.
Gold retreats as markets rethink December policy outlook
The latest pullback comes as traders further unwound bets on a December rate cut.
According to CME FedWatch, markets were pricing in a 39.8% probability of a 25-basis-point cut at the Fed’s December 10–11 meeting—down sharply from 61.9% only a week ago.
Expectations for no change rose to 60.2%, up from 38.1% previously.
Much of the shift stems from mounting uncertainty around the U.S. economic picture, particularly after the country emerged from its longest-ever government shutdown. The disruption is expected to postpone or distort key October economic indicators—most notably inflation and labor market figures.
With little visibility on those data points, the Fed faces its December meeting with limited guidance. Market expectations for a hold were also reinforced by signs of stubborn U.S. inflation, while Fed Chair Jerome Powell offered no clear signal on the likelihood of a December cut.
Higher-for-longer interest rates remain a headwind for gold and other non-yielding metals.
Elsewhere in precious metals, spot platinum inched up 0.1% to $1,548.0/oz but remained deep in the red after last session’s slide, while spot silver held steady at $50.5795/oz after retreating sharply from near record highs the previous week.
Dollar steadies ahead of Fed minutes and key U.S. data
The dollar firmed modestly on Monday, trimming part of last week’s losses as the dollar index ticked up 0.1%.
Markets are now turning their attention to a heavy U.S. data calendar, including Thursday’s nonfarm payrolls report for September and the November purchasing managers index readings.
The minutes from the Fed’s October meeting—set for release on Wednesday—are also expected to provide additional clues ahead of December’s policy decision.
Inflation and jobs remain the Fed’s primary policy drivers, but U.S. officials have warned that October’s releases may not be published at all due to the shutdown’s impact.