Spot Gold steadied on Monday, following Friday’s sell-off, as investors awaited a string of US macro data this week, including the September Non-Farm Payrolls report on Thursday, which may provide more insight regarding the health of the US economy.
“The selling pressure on gold last Friday was probably a bit overdone, hence we are seeing a rebound in the price action today,” KCM Trade Chief Market Analyst Tim Waterer was quoted as saying by Reuters.
“Scaled-back rate-cut expectations from the Fed for next month are effectively hampering gold from a yield point of view. Even though the shutdown has ended, there is no guarantee that markets or indeed the Fed will have full visibility over how the economy has been performing.”
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 43.5% chance of a 25 basis point Fed rate cut in December, compared to a 62% chance a week earlier.
Spot Gold was last little changed on the day to trade at $4,084.85 per troy ounce.
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