Gold prices traded near the flat line on Monday as a stronger U.S. dollar and fading hopes for additional Federal Reserve rate cuts curbed investor demand. Meanwhile, easing trade tensions between Washington and Beijing further reduced the precious metal’s safe-haven appeal.
Spot gold was slightly higher, up 0.08% at $4,005.39 per ounce as of 9:50 a.m. PST, according to Mettis Global. U.S. gold futures for December delivery gained 0.3% to $4,008.60.
Dollar Strength Pressures the Metal
The metal has declined about 10% since hitting a record $4,381.21 on October 20, pressured by the dollar’s rally to a near three-month high. The Fed recently reduced its benchmark rate by 25 basis points, marking its second cut this year.
However, traders have scaled back expectations for another reduction in December after Fed Chair Jerome Powell signaled a cautious approach to further easing. According to the CME FedWatch Tool, the probability of a December cut has dropped to 71%, down from over 90% before Powell’s comments.
Investors Await Key U.S. Data
Gold typically gains during periods of economic uncertainty or when borrowing costs decline, as its lack of yield becomes less disadvantageous compared to interest-bearing assets. Investors now await key U.S. data, including ADP employment figures and ISM purchasing manager indexes, for direction on the Fed’s next move.
Trade Developments Also in Focus
Last week, U.S. President Donald Trump said he had reached an understanding with China’s Xi Jinping to scale back tariffs in exchange for commitments on fentanyl control, agricultural imports, and rare earth exports.
Among other precious metals, silver rose 0.3% to $48.77, platinum climbed 1% to $1,583.28, and palladium gained 0.4% to $1,439.21.
