FX.co ★ Gold Dips Below $4,000 as Fed Cut Bets Fade

On Tuesday, gold prices fell below $4,000 per ounce, influenced by diminishing expectations for further interest rate cuts by the United States. Certain Federal Reserve officials refrained from advocating for additional monetary easing in December, following last week’s rate reduction. Fed Chair Jerome Powell had indicated that this could potentially be the final rate adjustment for the year. Currently, markets show a 65% likelihood of a December rate cut, a decrease from over 90% the previous week. Investors are keenly anticipating the release of U.S. private payroll data this week, which may offer more insights into the Federal Reserve’s future interest rate decisions. Simultaneously, demand for gold as a safe-haven asset has waned after an agreement was reached between the U.S. and China last week. Furthermore, China’s decision to eliminate a long-standing tax incentive on gold sales may cause domestic prices to rise, potentially reducing consumer demand in one of the world’s largest gold markets.