As of 0646 GMT, spot gold slipped 0.8% to $4,011.85 per ounce, while U.S. gold futures (December delivery) dropped 1.6% to $4,010.90.
According to Edward Meir, analyst at Marex, a combination of a stronger dollar and reductions in speculative positions has softened momentum in the bullion market. “The gold market is going to consolidate for now,” he said.
The dollar held steady following a sharp rise in the previous session, making bullion more expensive for holders of other currencies. The currency move comes on the heels of a U.S. political breakthrough: lawmakers last week agreed to end the country’s longest-ever government shutdown. The absence of fresh economic data during the shutdown had dampened hopes of another Fed rate cut in December.
Further cooling expectations, Federal Reserve Vice Chair Philip Jefferson reiterated on Monday that the central bank must “proceed slowly” on future cuts—comments that helped push the market-implied probability of a December cut down to 42%, from nearly 100% shortly after September’s decision, according to ANZ.
Gold, which does not offer interest, typically benefits from lower-rate environments and broader economic uncertainties. Market attention now turns to a wave of U.S. data due this week, including Thursday’s September nonfarm payrolls report, which will offer fresh signals about the strength of the world’s largest economy.
ANZ noted that while near-term sentiment has softened, longer-term factors—including geopolitical instability, concerns over U.S. debt sustainability, de-dollarisation trends, and sustained central-bank buying—should continue to underpin investment demand.
In other precious metals, spot silver fell 1.1% to $49.63 per ounce. Platinum declined 1.3% to $1,514.35, while palladium slipped 1.2% to $1,369.78.