Dollar strength pushes gold to one-week low as Fed bets unwind

Spot gold traded down 0.3% around $4,033 per ounce by 09:09 GMT after touching its weakest level since Nov. 10, while December futures dropped about 1% to roughly $4,032. The adjustment came alongside a decline in the implied probability of a December rate cut to a touch over 46%, from about 67% a week earlier, according to CME FedWatch. 

The shift in expectations tracks fresh Fed communication and a firmer dollar. Fed Vice Chair Philip Jefferson said the central bank needs to “proceed slowly” on further cuts, reinforcing caution after officials’ remarks last week. A stronger greenback reduced appeal for non-yielding gold, and traders looked ahead to delayed U.S. releases — minutes from the Fed’s last meeting on Wednesday and September nonfarm payrolls on Thursday — following the government shutdown that suspended major economic reports. 

Analysts framed the pullback as a function of rates and positioning rather than a turn in longer-term demand.“Market participants are pricing out U.S. interest rate cuts following more hawkish comments from Fed officials,” said UBS analyst Giovanni Staunovo, adding he expects prices “to bottom out soon” with multiple cuts still anticipated over coming quarters and continuing central-bank diversification into gold.

With the shutdown now over, the return of official data could clarify whether growth and inflation are soft enough to justify a 2025 easing path, but the latest odds show traders dialing back expectations for an immediate move in December. That re-pricing has trimmed gold’s momentum after the metal set an all-time high north of $4,350 last month and remains on pace for its best year since 1979, supported by central-bank buying and renewed ETF and bar-and-coin demand. 

Broader precious-metals pricing was mixed. Spot silver hovered near $50.20 per ounce, platinum ticked up to about $1,534, and palladium held around $1,394.

For now, gold’s immediate path hinges on the balance between rate expectations and safe-haven demand. If the incoming data and minutes reinforce a slower easing trajectory, real yields and the dollar could stay supportive and cap rallies. Conversely, signs of a more pronounced cooling in activity or inflation would likely restore confidence in early-2026 cuts and re-engage dip-buyers who view central-bank accumulation as a floor under prices.