Gold slumps to 2-month low as dollar marches on; Fed signals in focus
Gold prices fell to a two-month low on Thursday, pressured by a strong dollar rally, though traders have not lost confidence in a December rate cut following the latest U.S. economic data.
Spot gold fell 0.3% to $2,565.89 per ounce as of 10:08 a.m. ET (1508 GMT), touching its lowest level since Sept. 12. U.S. gold futures were down 0.6% to $2,571.20.
The U.S. dollar (.DXY), opens new tab held firm near a one-year high, making gold more expensive for overseas buyers.
"I don't see the latest inflation data as having a significant direct impact on gold," said Peter Grant, vice president and senior metals strategist at Zaner Metals.
"I think the Fed is going to hold its cards close to the vest until the Trump administration and the new Congress are in place and actually try to enact some of the policies that have been bandied about throughout the campaign and post-election."
Easing labor market conditions are expected to encourage the Federal Reserve to deliver a third interest rate cut next month, even as data showed progress in lowering inflation has stalled.
Markets now see a 79% probability of a 25-basis-point rate cut by the Federal Reserve in December. FEDWATCH
Following the Republicans' clean sweep in the Nov. 5 election, gold has plunged nearly $180 as President-elect Trump's proposed tariffs are seen as potential drivers of inflation, which could prompt the Fed to slow its rate-cutting pace.
Markets are dismissing gold as a hedge against inflation, despite Trump's policies potentially raising U.S. inflation, said Exinity Group Chief Market Analyst Han Tan.
Investors are awaiting remarks from Fed Chair Jerome Powell later in the day along with Friday's retail sales data.
Source: Reuters
