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Gold prices retreated further in Asian trade on Monday, continuing the downturn from the previous session as investors dialed back expectations for a Federal Reserve interest rate cut in December. The precious metal came under pressure from a firmer U.S. dollar and growing caution in financial markets, with traders adjusting their outlook amid heightened economic uncertainty.
Spot gold slipped 0.6% to $4,053.84 per ounce in early Asian hours, while December gold futures dropped 0.9% to $4,055.91. The decline followed a sharp shift in rate expectations, as markets reduced the likelihood of a December rate cut to 39.8%, down significantly from nearly 62% the week before, according to CME’s FedWatch Tool. Conversely, expectations for the Fed to hold rates steady increased to 60.2%, reflecting a growing belief that policymakers may delay easing until clearer economic signals emerge.
Much of the uncertainty stems from the recent end of the longest U.S. government shutdown on record, which likely disrupted the release of critical economic reports for October, including inflation and employment data. Without these indicators, analysts warn that the Fed is heading into its December 10–11 policy meeting with limited visibility. Stronger inflation trends and cautious comments from Fed Chair Jerome Powell also reinforced expectations for a prolonged period of elevated interest rates—an environment typically unfavorable for non-yielding assets like gold.
Other precious metals showed mixed movement. Spot platinum edged up 0.1% to $1,548.0 per ounce but remained pressured after steep losses in the previous session. Spot silver held steady at $50.5795 per ounce after pulling back sharply from near-record highs last week.
Meanwhile, the U.S. dollar saw a mild rebound, with the dollar index rising 0.1%. Traders are now turning their focus to key U.S. data releases this week, including November PMI figures, the Fed’s October meeting minutes, and Thursday’s nonfarm payrolls report for September. However, officials have hinted that October inflation and employment data may be unavailable due to the shutdown, creating additional uncertainty for the Fed’s rate path and market sentiment moving forward.
