Gold Prices Dip as Rate-Cut Expectations Weaken and Markets Eye U.S. Payrolls Data

Gold prices edged lower in Asian trading, easing after two consecutive days of gains as traders reduced expectations for a potential Federal Reserve interest rate cut in December. The pullback came as global equity markets rebounded sharply, driven in part by stronger-than-expected earnings from Nvidia, softening investor appetite for safe-haven assets such as gold.

Spot gold slipped 0.2% to $4,070.27 per ounce, while December gold futures fell 0.3% to $4,069.09 by 00:15 ET (05:15 GMT). The metal’s recent rally briefly paused after climbing more than 1% over the previous two sessions, weighed down by uncertainty surrounding the Fed’s next move. Minutes from the Fed’s October meeting showed policymakers were increasingly divided on whether further rate cuts were warranted, cooling market sentiment.

Rate-cut expectations dropped noticeably, with traders now assigning only a 21.5% probability of a 25-basis-point cut at the Fed’s December 10–11 meeting—down sharply from 42.4% just a day earlier, according to CME FedWatch. The prolonged U.S. government shutdown continues to delay delivery of key economic data, leaving the central bank with limited visibility and increasing the likelihood of a cautious pause.

Higher U.S. interest rates generally pressure non-yielding assets like gold, although ongoing concerns about excessive government spending in major economies and rising Japanese bond yields provided some underlying support. Heightening diplomatic tensions between China and Japan also helped sustain haven demand.

Other precious metals saw modest improvement, with spot platinum rising 0.8% to $1,560.13 per ounce, while silver held steady at $51.3415.

Investor focus now turns to the delayed U.S. nonfarm payrolls report for September, expected to offer clearer insight into the slowing labor market. Although the data is unlikely to directly influence December’s policy decision, recent private-sector reports and jobless claims point to steady softening. Still, persistent inflation may keep the Fed from easing aggressively, even if labor conditions continue to weaken.