Spot Gold was on course for a weekly loss, while the US Dollar was eyeing its best week in over a month, as stronger-than-expected US employment data added to expectations that the Federal Reserve would abstain from lowering borrowing costs in December.
Employers in all sectors of the US economy, excluding farming, added 119,000 job positions in September, well above market consensus of 50,000.
Markets are now pricing in about a 35% chance of a 25 basis point Fed rate cut in December, compared to a 44% chance a week earlier.
Yesterday Chicago Fed President Austan Goolsbee said he was “uneasy” about frontloading rate cuts, with progress on inflation moving towards the 2% target looking to have stalled.
“Gold prices are consolidating at the moment, and we see the dollar has strengthened quite a bit, and behind it, there is a lot of speculation whether the Fed will continue to cut interest rates or not,” GoldSilver Central MD Brian Lan was quoted as saying by Reuters.
“I think now the market is unsure, and especially, now, when we are going to the end of December, we expect a lot of traders will be taking profit off their positions, and that’s what we saw at the end of last week to this week.”
Spot Gold was last down 0.74% on the day to trade at $4,047.41 per troy ounce.
The precious metal has retreated 1.00% so far this week.
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