Gold prices weakened in Asian trading on Monday, pressured by a renewed shift toward risk assets after market expectations for a December rate cut from the U.S. Federal Reserve surged. Equity markets and other higher-risk assets rebounded sharply, diverting flows away from safe havens. Reports of ongoing U.S.-backed efforts to secure a Russia–Ukraine ceasefire added further headwinds for bullion.
Even so, unresolved concerns about global fiscal strains and a diplomatic rift between China and Japan helped keep the metal anchored above the $4,000 mark. The upcoming wave of U.S. economic data releases also curbed deeper losses amid speculation that lower interest rates may still be on the horizon.
By 01:07 ET (06:07 GMT), spot gold was down 0.3% at $4,052.53/oz, while December gold futures slipped 0.7% to $4,086.10/oz.
Gold Trails Risk Assets as December Rate-Cut Odds Jump
Expectations for a December rate cut spiked after New York Fed President John Williams signaled the central bank still saw room for easing next month. Williams pointed to potential softening in the labor market and noted that upside risks to inflation had diminished.
According to CME’s FedWatch tool, traders were pricing in a 67.3% probability of a 25-basis-point reduction at the Fed’s December 9–10 meeting—up from 39.8% just a week earlier.
Other precious metals moved mixed on Monday: spot platinum rose 1.4% to $1,537.65/oz, while spot silver dipped slightly to $49.92385/oz. Gold’s decline remained muted thanks to the renewed prospect of near-term U.S. rate cuts.
U.S. Data Flood Ahead
This week’s market focus is firmly on a long list of U.S. economic indicators for September that were delayed by the extended government shutdown. These prints are expected to provide clearer guidance on the health of the world’s largest economy heading into December.
Monday will bring industrial production and capacity utilization data, followed by producer price index and retail sales figures on Tuesday.
A heavy slate arrives Wednesday, including building permits, durable goods orders, jobless claims, and the key third-quarter GDP reading. The PCE price index, the Fed’s preferred inflation gauge, is also due Wednesday.
While the data should help fill in part of the picture, the absence of updated October numbers means the Fed will still be operating with limited visibility at its final policy meeting of the year. Policymakers appear increasingly divided over the need for further easing in 2025, contributing to earlier expectations for a continued pause.