Gold struggled to find support overnight, sliding alongside risk assets as investor caution continues to spread through markets. Early Tuesday trading saw a small rebound, but the metal remains under pressure, reflecting waning confidence in a December Federal Reserve rate cut.
Spot gold was trading at $4,038 by 10:00 GMT, bouncing modestly from a low of $3,997. The retreat stems primarily from markets quickly pricing out expectations for further Fed easing, amid uncertainty over the US economy and the delayed release of key economic data caused by the prolonged government shutdown.
Attention now turns to the long-delayed September nonfarm payrolls report due Thursday, which is expected to be the most recent official labor market reading before the Fed’s December 10-11 meeting. Futures pricing shows a 42.4% chance of a 25-basis-point cut and a 57.6% chance of a hold, highlighting the uncertainty surrounding monetary policy.
Higher-for-longer US interest rates are weighing on non-yielding gold, making Treasuries a comparatively more attractive option. Mixed signals from Fed officials have added to the confusion, leaving markets on edge.
Equities are sliding, Bitcoin has dropped below $90,000, and gold isn’t holding up either. Market sentiment is fragile, with investors finding few places to hide as volatility spreads across asset classes.