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Gold Falls as Dollar Rises Amid US Jobs Data Awaitment
Gold prices fell 1% on Thursday, November 20, as the dollar strengthened and expectations of a US Federal Reserve interest rate cut in December receded, while investors awaited a delayed US jobs report.
Spot gold fell 0.6% to $4,055.20 an ounce, recovering from a 1% decline earlier in the day.
US gold futures for December delivery fell 0.7% to $4,053.80 an ounce.
The dollar index rose, nearing a two-week high against major currencies, making gold more expensive for holders of other currencies.
"The stronger dollar is weighing on gold, but price volatility is typical at this time of year as we have some good bargains with profit-taking and position adjustments from early investments ahead of the new year," said independent analyst Ross Norman.
The focus is now on the US non-farm payrolls report for September, which was delayed due to the recent government shutdown.
The data is expected to provide further clues about the central bank's policy direction.
According to the CME FedWatch tool, traders now expect a rate cut at the Federal Reserve's December 9-10 meeting with a 33% probability, down from 49% on Wednesday.
Gold, which does not offer yields, typically tends to rise in low interest rate environments and during times of economic uncertainty.
The minutes of the Federal Reserve meeting, released yesterday, showed policymakers warning that lowering interest rates could undermine efforts to combat inflation. The Fed cut rates by a quarter of a percentage point at both its September and October meetings.
In trading, gold futures fell by about 0.2% to $4,074 an ounce, while the spot price of the yellow metal declined by less than 0.1% to $4,076.7 an ounce.
