Gold Prices Fall on Strong US Payrolls Data, Impacting Fed Rate Cut Bets
In Asian trade on Monday, gold prices saw a slight decline as the strong U.S. payrolls data led to speculation of a smaller interest rate cut by the Federal Reserve. The yellow metal fell from record highs as the dollar and U.S. Treasury yields rose.
Investors are closely watching signals from the Fed and the U.S. economy this week, which will likely influence interest rates. Gold prices fell 0.2% to $2,647.64 an ounce, while gold futures for December delivery dropped slightly to $2,667.10 an ounce.
The surge in bullion prices in September following a 50 basis point rate cut by the Fed has been tempered by the latest payrolls data, with expectations now leaning towards a 25 bps cut in November. Traders are pricing in a high probability of this scenario, leading to a less favorable environment for gold prices.
Traders are also anticipating higher terminal rates from the Fed, impacting metal prices. The focus this week is on speeches by Fed officials and the release of the September meeting minutes for further insights on interest rates. Inflation data scheduled for later in the week will also play a role in shaping the rate outlook.
Other precious metals like silver and platinum also saw declines, while copper prices steadied amid expectations of more stimulus in China. Benchmark copper prices on the London Metal Exchange remained stable, with trading volumes affected by the Chinese Golden Week holiday.
As Chinese markets reopen and more stimulus measures are expected, the outlook for industrial metals like copper remains positive. Keep an eye on developments in the global economy and central bank policies for potential impacts on your investment decisions.