Gold dips as dollar gains, traders dial back US rate-cut bets

Gold prices edged lower on Thursday, weighed down by a stronger dollar and reduced expectations for a Federal Reserve rate cut in December, with investors eyeing a delayed US jobs report.

Spot gold was down 0.1% at $4,077.82 per ounce, as of 0449 GMT. US gold futures for December delivery fell 0.2% to $4,076.50 per ounce.

“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 said.

“In the short-term perspective, this causes gold price to remain lacklustre 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.”

The dollar index rose to a more than two-week high against its rivals, making gold more expensive for holders of other currencies.

Minutes from the Fed’s October meeting released on Wednesday showed it cut interest rates even as policymakers cautioned that doing so could risk entrenched inflation and a loss of public trust in the central bank.

Traders now see nearly a 33% chance for a rate cut at the Fed’s December 9-10 meeting, down from 49% on Wednesday, CME Group’s FedWatch tool showed.

Non-yielding gold tends to do well in a low-interest-rate environment and during times of economic uncertainties.

The focus is now on the September US non-farm payrolls report, scheduled for later in the day after being delayed due to the recent US government shutdown.

The data is expected to provide further cues on the Fed’s policy trajectory.

Economists polled by Reuters expect the report will show that employers added 50,000 jobs during the month.

SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings rose 0.22% to 1,043.72 tonnes on Wednesday from 1,041.43 tonnes on Tuesday.

Elsewhere, spot silver was flat at $51.34 per ounce, platinum climbed nearly 1% to $1,559.87 and palladium added 1.3% to $1,397.62.