Spot Gold slid on Friday, as the US Dollar firmed due to a lack of clarity regarding Federal Reserve future rate cuts.
Still, the yellow metal was on course for its third consecutive month of advance.
The Federal Reserve lowered its federal funds rate target range by 25 basis points to 3.75%-4.00% at its October meeting, in line with market consensus. This way, borrowing costs were brought to their lowest level since 2022.
Yet, Fed Chair Jerome Powell said at the regular press conference that a December rate cut was not a foregone conclusion.
As a result, market players pared bets of another rate cut by the Fed in December.
Markets are now pricing in about a 75% chance of a 25 basis point Fed rate cut in December, compared to a 91% chance a week earlier.
“The Fed Chairman did have his hawkish cap on this week, which didn’t do gold any favors,” KCM Trade’s Chief Market Analyst Tim Waterer was quoted as saying by Reuters.
“The prospect of a rate cut in December now looks like it could be much more of a toss-up than was previously thought, which has boosted the dollar while making things a bit more complicated for gold from a yield perspective.”
The US Dollar Index stood close to a three-month high. A firmer dollar makes dollar-priced Gold less appealing to international investors holding other currencies.
Spot Gold was down 0.41% on the day to trade at $4,008.00 per troy ounce.
The precious metal has risen 3.90% so far this month.
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