Spot Gold eased on Thursday due to a firmer US Dollar and as market players scaled back expectations of a Fed interest rate cut next month.
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 minutes from the Federal Reserve’s October meeting revealed that interest rates had been lowered even as policy makers cautioned that such a move could risk entrenched inflation and a loss of public trust in the financial institution.
Markets are now pricing in about a 33% chance of a 25 basis point Fed rate cut in December, compared to a 50% chance a week earlier.
“Gold right now is down primarily due to the fact that the rate-cut bets have been pared back quite remarkably in the last two weeks,” OANDA senior market analyst Kelvin Wong was quoted as saying by Reuters.
“In the short-term perspective, this causes gold price to remain lackluster below $4,100 level. I see a resistance at $4,155, then gold could potentially trade below close to the $4,000-$3,980 level.”
Investor focus now sets on the September Non-Farm Payrolls report today, which may provide more insight regarding the health of the US economy.
Employers in all sectors of the US economy, excluding farming, probably added 50,000 job positions in September, according to market consensus.
The US Dollar Index was holding near an over two-week high.
Spot Gold was last down 0.20% on the day to trade at $4,069.54 per troy ounce.
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