Gold prices fell on Tuesday as traders booked profits after a sharp rebound from the $4,000 level. US futures dropped to $4,234.40 and spot gold slipped to $4,203.55. Analysts expect gold to move sideways between $4,000 and $4,400 unless the Federal Reserve signals a rate cut, which could lift prices further.
Gold prices fall
Gold prices fell on Tuesday after a strong rise earlier in the week. US gold futures dropped 0.9% to $4,234.40 per ounce for February delivery. Spot gold fell 0.7% to $4,203.55 per ounce. Analysts said the decline was mainly due to traders taking profits after the metal rebounded from $4,000 to around $4,250 in recent days. Carlo Alberto De Casa, an external analyst at Swissquote, said he expects gold to trade between $4,000 and $4,400 in the next few weeks. He said the market is likely to move sideways unless there is a strong policy signal from the Federal Reserve. De Casa added that a rate cut by the Fed could give gold more room to rise.
Markets await data
Benchmark 10-year US Treasury yields stayed close to a two-week high. This reduced demand for gold, which does not offer interest. Yields were supported by weakness in Japanese and European government bonds on Monday. New US data also added pressure. A report showed that US manufacturing contracted for the ninth straight month in November. Investors now look ahead to the November ADP employment report and the delayed September Personal Consumption Expenditures Index. These reports may shape expectations for the Federal Reserve’s meeting next week.
Federal Reserve Chair Jerome Powell did not speak about interest rates in his latest remarks at Stanford University. However, market expectations remain steady. According to CME’s FedWatch tool, traders see an 87% chance of a rate cut in December. A rate cut usually supports gold because it lowers the cost of holding non-yielding assets.
Other metals
Markets are also waiting for President Donald Trump to announce the next Federal Reserve chair. White House economic adviser Kevin Hassett is reported to be a top contender. He is known to support lower interest rates, which could influence future gold prices if he is selected. Other metals also moved on Tuesday. Silver fell 1.6% to $57.01 per ounce after touching a record high of $58.83 the day before. Despite the dip, silver is up 97% for the year. Platinum slipped 0.9% to $1,642.56 per ounce. Palladium gained 0.8% to $1,435.44 per ounce.
