Gold prices drop by 1%, marking the largest decline in 45 days.
In other metals, spot silver dropped 4.2% to $30.39 per ounce, platinum fell 1.7% to $955.55, and palladium declined 1.7% to $1,006.61.
Interest rates in the U.S. could decline less than the market had predicted, impacting the price of the precious metal in international markets.
Gold prices fell more than 1% on Tuesday, marking their biggest percentage drop in a month and a half, as the latest U.S. employment data reduced expectations of a significant rate cut. Meanwhile, markets awaited the minutes from the Federal Reserve’s latest policy meeting for further signals.
Spot gold dropped 1.1%, to $2,615.50 per ounce, marking its fifth consecutive session of losses and falling well below the all-time high of $2,685.42 from September 26. U.S. gold futures slid 1.2%, to $2,634.60 per ounce. The decline over the last two days is attributed to changing expectations regarding interest rate cuts.
Bond yields have risen, and the outlook on further rate cuts has been revised.
According to the CME’s FedWatch tool, markets had priced in a 50-basis-point rate cut for the Federal Reserve’s November meeting following last week’s strong employment report. However, they now see an 87% chance of a 25-basis-point cut.
Markets are now focused on the minutes from the Federal Reserve’s last policy meeting, which are set to be released on Wednesday, followed by U.S. Consumer Price Index data on Thursday and the Producer Price Index on Friday.
U.S. inflation data due Thursday is expected to show further easing in price pressures, but it is unlikely to spark speculation of additional rate cuts by the Fed. As a result, any rise in gold prices will likely be driven mainly by geopolitical risks.
Gold-backed exchange-traded funds (ETFs) recorded their fifth consecutive month of inflows in September, as North American ETFs increased their holdings, the World Gold Council reported on Tuesday.
In other metals, spot silver dropped 4.2% to $30.39 per ounce, platinum fell 1.7% to $955.55, and palladium declined 1.7% to $1,006.61.
Aluminum is nearing a two-week low due to falling energy prices.
Three-month aluminum on the London Metal Exchange (LME) hit $2,564.50 per metric ton, its lowest since September 26, and later settled down 3.3% at $2,570.50 per ton.
As for industrial metals, three-month copper fell to $9,700 per ton, its lowest since September 24, and closed down 1.6% at $9,769. Nickel dropped 2.2% to $17,650 per ton.
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