NEW YORK: Gold prices dropped more than 1percent on Thursday, pressured by a firm dollar and fading expectations of a Federal Reserve rate cut in December, as investors waited for a delayed US jobs report later in the day.
Spot gold was down 0.6percent at USD4,055.20 per ounce at 1104 GMT, recovering some of its earlier 1percent fall. US gold futures for December delivery fell 0.7percent to USD4,053.80 per ounce.
The dollar index firmed near a two-week high, making gold more expensive for holders of other currencies.
“Dollar firmness is weighing on gold but the price choppiness is typical for this time of year where we have some good two-way trade with profit-taking and book-squaring meeting early investments ahead of the new year,” said independent analyst Ross Norman. 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 US central bank.
Traders are now focused on the September jobs report, delayed due to the government shutdown, for clues on the Fed’s next move. September nonfarm payrolls likely increased by 50,000 jobs, more than double August’s 22,000 gain, a Reuters survey showed.
The Fed will still lack much of the data at its policy meeting on December 10, as the next jobs report has been delayed until December 16.
Traders now see nearly a 34percent chance for a rate cut next month, down from 49percent 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 uncertainty.
UBS raised its 2026 mid-year gold target price by USD300 to USD4,500 per ounce, on expectations of Federal Reserve rate cuts, persistent geopolitical risks, and strong central bank and ETF demand. Spot silver fell 1.4percent to USD50.66 per ounce, platinum was down 0.5percent at USD1,538.85 and palladium rose 1.1percent to USD1,394.74.
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