Khaberni - Spot gold prices dropped to $3,968.09 per ounce on Tuesday, marking a decrease of 0.8%, while December gold futures decreased by 0.9% to reach $3,979.20.
This decrease coincides with the dollar index reaching its highest level in three months, increasing the cost of gold for holders of other currencies and pressuring its global prices.
The role of U.S. monetary policy in gold movements
The gold drop also resulted from investors reducing bets on another rate cut following recent divisions within the Federal Reserve.
David Meeger, the director of metals trading at "High Ridge Futures", said, "With the dollar reaching new highs, we see it impacting the gold market... Part of this strength comes from the reduced likelihood of a rate cut in December."
Tim Waterer, Senior Market Analyst at "K.C.M Trade", noted that the strength of the dollar directly pressures gold and traders are reassessing the likelihood of a rate cut before the end of the year.
The Federal reserve had cut interest rates last week for the second time this year. However, its chairman Jerome Powell confirmed that another cut in 2025 is not a foregone conclusion. Current market expectations show only a 65% chance for a rate cut in December, compared to more than 90% before Powell's statements.
Economic data awaited and opportunities for gold
This week, investors are monitoring U.S. economic data, particularly the employment report issued by "A.D.P.", looking for indicators about the course of monetary policy.
Waterer said:
"If the employment data disappoints, it could give gold a chance to rebound."
Despite the recent decline, gold is still up about 53% since the start of the year, but it has fallen by more than 8% from its record high recorded on October 20.
Other precious metals
Silver: $47.47 per ounce, down 1.3%
Platinum: $1,547.09, down 1.2%
Palladium: $1,394.75, down 3.5%
