Gold falls on stronger dollar as investors trim rate-cut bets

Gold prices slipped on Monday, pressured by a stronger dollar as investors dialed back bets for further Federal Reserve rate cuts following Chair Jerome Powell’s hawkish remarks last week, while easing U.S.-China trade tensions also weighed on bullion.

FUNDAMENTALS

* Spot gold was down 0.8% at $3,968.76 per ounce, as of 0016 GMT.

* U.S. gold futures for December delivery slipped 0.5% to $3,978.30 per ounce.

* The U.S. dollar held steady near three-month highs reached last week, making greenback-priced bullion more expensive for other currency holders.

* The U.S. central bank cut interest rates on Wednesday by a quarter of a percentage point for the second time this year, taking the benchmark overnight rate to a target range of 3.75%-4.00%. * Non-yielding gold thrives in a low interest rate environment and during economic uncertainties. * Traders now see a 71% chance that the Fed will cut rates again in December, down from over 90% before Powell’s remarks, as per CME’s FedWatch Tool.

* U.S. President Donald Trump said on Thursday he had agreed with Chinese President Xi Jinping to trim tariffs on China in exchange for Beijing cracking down on the illicit fentanyl trade, resuming U.S. soybean purchases and keeping rare earths exports flowing.

* Parts of the U.S. economy, particularly housing, may already be in recession because of high interest rates, Treasury Secretary Scott Bessent said on Sunday, repeating his call for the Fed to accelerate rate cuts.

* Gold has gained 51% year-to-date, supported by geopolitical and economic uncertainties, U.S. rate-cut bets and sustained central bank buying.

* Bullion prices hit a record high of $4,381.21 on October 20, but have fallen more than 10% since then, in part due to easing trade tensions.

* Meanwhile, SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings fell 0.11% to 1,039.20 metric tons on Friday from 1,040.35 tons on Thursday.

* Elsewhere, spot silver fell 0.5% to $48.41 per ounce, platinum was down 0.1% at $1,566.40 and palladium lost 0.6% to $1,424.88.

DATA/EVENTS (GMT)

0145 China RatingDog Manufacturing PMI Final Oct

0850 France HCOB Manufacturing PMI Oc

0855 Germany HCOB Mfg PMI Oct

0900 EU HCOB Mfg Final PMI Oct

0930 UK S&P GLOBAL MANUFACTURING PMI Oct

1445 US S&P Global Mfg PMI Final Oct

1500 US ISM Manufacturing PMI Oct