Spot Gold was on course for a weekly advance, while the US Dollar was eyeing its second straight weekly loss, as investors awaited more US macro data to assess the probability of a December rate cut by the Federal Reserve.
“This week, gold has done well and it’s mainly because of a bit of a weakening of the dollar and also the speculative flows coming in expecting the Fed to lower interest rates,” GoldSilver Central MD Brian Lan was quoted as saying by Reuters.
“However, the U.S. government has opened and because of all these slowdown and inflation fears, the expectations shifted slightly to that the Fed might not be looking to cut rates aggressively and this caused a slight pullback in gold prices.”
An increasing number of Fed officials have signaled reticence on further rate cuts due to inflation concerns and indications of relative stability in the US labor market.
The Federal Reserve lowered its federal funds rate target range by 25 basis points to 3.75%-4.00% at its October meeting. But, Fed Chair Jerome Powell had said that a December rate cut was not a foregone conclusion.
Markets are now pricing in about a 50% chance of a 25 basis point Fed rate cut in December, compared to a 67% chance a week earlier.
Spot Gold was last up 0.19% on the day to trade at $4,179.75 per troy ounce.
The precious metal has risen 4.49% so far this week.
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