Gold dips as dollar firms on reduced rate-cut prospects

Gold prices dipped on Monday, weighed down by a firm dollar near six-month highs and diminished prospects of a December interest rate cut by the U.S. Federal Reserve.

FUNDAMENTALS

* Spot gold was down 0.3% at $4,051.48 per ounce, as of 0132 GMT.

* U.S. gold futures for December delivery edged 0.7% higher to $4,049.50 per ounce.

* The dollar climbed to a near six-month high on Friday, as signs of faster U.S. job growth in September suggested that the U.S. central bank is likely to pause cutting interest rates in December. * A stronger dollar makes greenback-priced gold more expensive for other currency holders.
* Minutes from the Fed October meeting, released on Wednesday, showed policymakers cut interest rates but warned the move could risk entrenched inflation and erode public confidence in the U.S. central bank.
* A U.S. Labor Department report, delayed by the federal government shutdown, showed on Thursday that September nonfarm payrolls increased by 119,000, more than double the estimated increase of 50,000.
* Meanwhile, U.S. factory activity slipped to a four-month low in November as tariffs drove up import prices, curbing demand.

* The probability of a Fed rate cut next month inched down to 69% on Monday, after jumping to 74% in the previous session, according to the CME FedWatch Tool.

* Bets of rate cuts had surged to 74% from 40% on Friday following dovish comments from New York Fed President John Williams.

* Gold, a non-yielding asset, tends to do well in low-interest-rate environments.

* Other Fed members maintained a hawkish stance, with Dallas Federal Reserve President Lorie Logan calling for leaving the policy rate on hold “for a time” while Fed Presidents for Chicago and Cleveland both warned on Thursday that cutting rates further right now carries a wide range of risks for the economy.

* Elsewhere, spot silver slipped 0.3% to $49.86 per ounce, platinum rose 1.1% to $1,527.25, and palladium added 0.7% to $1,384.18.

DATA/EVENTS (GMT)

0900 Germany Ifo Business Climate, Curr Conditions, Expectations New November.