Gold Slips as Stronger Dollar and Softer Rate-Cut Expectations Pressure Prices

Mumbai – Gold prices moved slightly lower on Thursday as a firmer U.S. dollar and reduced expectations for a Federal Reserve rate cut in December prompted traders to reassess their short-term outlook for the precious metal.

Spot gold slipped by a small margin in early trading, reflecting cautious sentiment ahead of the delayed U.S. non-farm payrolls report,
a data release that could further influence expectations on interest rates and monetary policy.

Market analysts noted that gold’s decline has closely tracked the recent pullback in rate-cut bets, a trend driven by shifting economic indicators and minutes from the Federal Reserve’s October meeting.

Those minutes revealed internal caution among policymakers about easing too aggressively, highlighting concerns that rapid rate cuts could risk embedding inflation and weaken confidence in the central bank’s long-term management.

The dollar index strengthened to a level not seen in more than two weeks, making gold more expensive for buyers using other currencies and adding additional downward pressure on prices.

With gold traditionally benefiting from lower interest rates and economic uncertainty, the reduced likelihood of a near-term rate cut has limited its momentum, keeping prices below the $4,100 threshold.

Analysts said resistance is currently seen around the $4,155 level, while the metal could drift toward the $4,000 to $3,980 range if selling pressure persists.

U.S. gold futures also edged lower alongside spot prices, mirroring overall caution in the broader commodities market ahead of a busy week of economic releases.

Traders are now looking toward the September U.S. jobs report, which was postponed due to the recent government shutdown and is expected to offer fresh signals on the health of the labor market.

Economists anticipate job gains of around 50,000 for the month, a modest figure that could influence market expectations for December’s Federal Reserve meeting.

A softer jobs number could revive some hopes for easing, while stronger-than-expected hiring could reinforce the central bank’s stance on keeping policy tighter for longer.

Meanwhile, holdings in the world’s largest gold-backed exchange-traded fund saw a slight uptick, with SPDR Gold Trust reporting a small increase in total tonnage, signaling continued—if cautious—investment interest.

In the broader precious metals market, silver traded largely flat in early hours, indicating limited movement and a steady tone among industrial metals.

Platinum gained close to 1% during the session, showing resilience despite broader market hesitation, while palladium rose more than 1%, extending recent upward momentum linked to automotive industry demand.

Market participants say precious metals are likely to remain sensitive to macroeconomic data releases in the coming days, as investors weigh the competing forces of currency strength, inflation dynamics, and monetary policy direction.

With year-end trading approaching and volatility expected to rise, gold’s trajectory will depend heavily on how incoming U.S. economic data shapes expectations for future rate adjustments.

Analysts note that despite short-term softness, the metal remains supported by long-term structural factors including diversification demand and geopolitical uncertainty.

For now, traders are watching for clear signals from labor data and central bank communications, as these will determine whether gold can regain upward momentum or remain pressured by a stronger dollar.