Spot Gold extended its streak of losses on Tuesday, as market players scaled back expectations of a US interest rate cut next month.
A firmer US Dollar also weighed on the precious metal.
Fed Vice Chair Philip Jefferson said on Monday the central bank had to “proceed slowly” with policy easing, which dented expectations of a rate cut in December.
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.
Markets are now pricing in about a 46% chance of a 25 basis point Fed rate cut in December, compared to a 67% chance a week earlier.
“Expectations the Fed will cut again next month dropped to 42% overnight from a high of almost 100% soon after the September decision. This has weighed on investor appetite for gold,” ANZ wrote in a client note, cited by Reuters.
“Nonetheless, structural tailwinds, such as geopolitical uncertainty, concerns about U.S. debt sustainability, de-dollarisation trends and central bank buying, are expected to support investment demand in the medium- and long-term.”
Investor focus now sets on 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.
Spot Gold was last down 0.85% on the day to trade at $4,011.61 per troy ounce.
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