Gold prices fell below $4,000 per ounce on Tuesday due to a strong U.S. dollar, easing investor interest amid reduced expectations of a December rate cut and moderated U.S.-China trade tensions. Spot gold declined 0.4% to $3,984.49, while December futures slipped 0.5% to $3,994.40. Other precious metals also fell, with silver at $48.05, platinum at $1,561.10, and palladium at $1,422.43. Investors await the ADP employment report and ISM PMI index for clues on Fed policy.
Gold Prices Dip Below $4,000 Again Amid Strong Dollar
Gold prices fell below $4,000 per ounce again on Tuesday, pressured by a strong U.S. dollar. Investor interest in gold has eased slightly as expectations of a U.S. interest rate cut in December have diminished and U.S.-China trade tensions have moderated.
According to a report from Reuters at 11 a.m. on Tuesday (October 4), spot gold declined 0.4% to $3,984.49 per ounce. In the U.S. futures market for December delivery, gold prices slipped 0.5% to $3,994.40 per ounce.
The dollar remains steady at a three-month high. Diverging opinions within the Federal Reserve have made traders cautious about predicting further rate cuts.
Tim Watterson, chief market analyst at KCM Trades, said, “A strong dollar is acting like a thorn for gold. Traders are recalculating whether another rate cut will occur before the end of the year.”
Although the Federal Reserve cut interest rates for the second time this year last week, Chairman Jerome Powell emphasized that another rate reduction this year is “not guaranteed.”
CME’s FedWatch tool indicates that the probability of a December rate cut has now fallen to 65%, down from over 90% before Powell’s remarks.
Fed officials expressed differing views on the economic outlook on Monday. This debate is expected to intensify ahead of the December policy meeting, particularly due to delays in key economic data releases, including labor statistics, caused by the U.S. government shutdown.
Historically, lower interest rates and economic uncertainty boost gold’s appeal as a safe-haven asset.
Investors are now awaiting the ADP employment report and this week’s ISM PMI index, both scheduled for release on Wednesday, which could provide guidance on the Fed’s next policy steps.
Watterson added, “If the ADP report comes in weak again, gold could see a recovery.”
So far this year, gold prices have surged nearly 53%, although they remain more than 8% below the record high set on October 20.
Meanwhile, U.S. President Donald Trump last week announced that Washington has agreed to slightly reduce tariffs on China in exchange for certain concessions from Beijing.
Other precious metals also saw declines. Silver slipped 0.1% to $48.05 per ounce, platinum fell 0.3% to $1,561.10, and palladium dropped 1.6% to $1,422.43 per ounce.