Gold holds steady as markets trim expectations for near-term Fed rate cut

Gold steadied on Thursday after a two-day rise, as investors dialed back expectations of an interest-rate cut by the Federal Reserve next month.

Bullion hovered near $4,070 an ounce, following an almost 1% gain over the previous two sessions, News.Az reports, citing Bloomberg.

The U.S. will not release its October employment report, leaving Fed officials without a key data point ahead of their final policy meeting of the year.

Minutes from the Fed’s October meeting indicated that many policymakers viewed it as likely appropriate to keep interest rates unchanged for the remainder of 2025, reinforcing market expectations of a steady-rate environment.

Bullion tends to benefit from lower rates as it doesn’t pay interest, so if the Fed stands pat that could diminish the commodity’s appeal. In addition, a gauge of US dollar rose by the most since late September on Wednesday, which is also a headwind as it makes the metal more expensive for most buyers.

Gold has rallied strongly this year, gaining more than 50% and hitting a record in October, before retracing some of its gains. The advance has been supported by two earlier rate cuts from the Fed, as well as elevated central-bank buying and inflows into bullion-backed exchange-traded funds.

Prices pared gains after the minutes revealed a divided Fed, which cut last month despite concern easing too soon could undermine progress on inflation, said Manav Modi, an analyst at Motilal Oswal Financial Services Ltd. Uncertainty intensified when the October labor report was canceled, Modi added.

Expectations for a reduction at the December meeting have declined considerably. Swap contracts linked to the Fed policy rate now imply a 35% chance of a cut. Before Wednesday, the odds were about 50-50.

Later, investors will assess the September payrolls report, which is due at 8:30 a.m. New York time after a delay caused by the government shutdown.

The metal was 0.2% lower at $4,070.06 an ounce at 1:51 p.m. in Singapore. The Bloomberg Dollar Spot Index was flat after rising 0.5% on Wednesday. Silver held above $51 an ounce, after swinging between gains and losses, while platinum and palladium both advanced.