Gold prices dipped in Asian trading on Thursday, easing back after two consecutive sessions of gains as traders scaled down their expectations for a Federal Reserve rate cut in December.
Risk appetite improved across global markets, driven by upbeat earnings from Nvidia Corp., which reduced immediate demand for traditional safe-haven assets. With attention now turning fully toward the upcoming U.S. nonfarm payrolls release, investors were reluctant to extend bullion’s rally.
Ongoing concerns about elevated government spending levels in major economies helped provide a floor for prices. Rising Japanese government bond yields and escalating diplomatic tensions between China and Japan also offered some support for gold’s safe-haven appeal.
Spot gold edged down 0.2% to $4,070.27 an ounce, while December gold futures slipped 0.3% to $4,069.09 an ounce as of 00:15 ET (05:15 GMT).
Rally Pauses as Traders Dial Back December Cut Expectations
Bullion’s upward momentum stalled after gaining more than 1% over the previous two sessions. The pullback followed a sharp reassessment of the likelihood that the Fed will deliver a rate cut at its December 10–11 meeting.
The minutes from the Fed’s October gathering revealed a wider divergence of views among policymakers, prompting markets to rethink the probability of near-term easing. According to CME’s FedWatch tool, traders now assign just a 21.5% chance of a 25-basis-point cut next month—down from 42.4% only a day earlier.
Delays in key economic data caused by the extended U.S. government shutdown mean the central bank will head into December’s meeting with limited visibility, making a cautious pause more likely.
Higher-for-longer U.S. rates typically weigh on non-yielding assets such as gold, adding to the metal’s hesitation.
Among other precious metals, spot platinum rose 0.8% to $1,560.13 per ounce, while spot silver held steady at $51.3415 per ounce after recent declines.
Investors Await September Payrolls for Fresh Direction
The market’s next major catalyst will be the long-delayed September nonfarm payrolls report, due later in the day. Although the data will likely come too late to meaningfully sway the Fed’s December call, it is still expected to offer a clearer read on the labor market’s trajectory.
The release was postponed due to the protracted government shutdown, and officials have signaled that October’s payroll figures may never be published.
Private-sector indicators and this week’s jobless claims suggest that U.S. labor conditions continue to soften. Such a trend could eventually strengthen the case for a rate cut, given the Fed’s mandate to prevent excessive labor market deterioration.
However, stubborn inflation remains a key constraint on how quickly policymakers may be willing to act.