Gold holds under $4,000 on dollar resilience, Fed rate-cut outlook

Gold traded below the $4,000 per ounce mark again on Tuesday as the dollar remained resilient at over three-month highs, while reduced chances of another U.S. interest rate cut in December and easing U.S.-China trade tensions blunted bullion’s demand.

FUNDAMENTALS
* Spot gold slipped 0.4% to $3,983.87 per ounce, as of 0047 GMT.

* U.S. gold futures for December delivery lost 0.5% to $3,994.10 per ounce.

* The dollar rose to a three-month high against the euro, extending its gains from last week on doubts about the outlook for another U.S. Federal Reserve rate cut this year.

* The Fed last week cut interest rates for the second time this year, but Chair Jerome Powell said another cut this year was “not a foregone conclusion”.

* Market participants now see a 65% chance that the Fed will cut rates again in December, down from over 90% before Powell’s remarks, as per CME’s FedWatch Tool.* Fed officials on Monday continued pressing competing views on the economy, a debate set to intensify ahead of the Fed’s December policy meeting and in the absence of key data, including from the Bureau of Labor Statistics, due to the federal government shutdown. * Investors now eagerly await the release of ADP U.S. employment data due on Wednesday and ISM PMIs this week.

* Non-yielding gold tends to do well in a low-interest-rate environment and during times of heightened economic uncertainty.

* Bullion hit a record high of $4,381.21 on October 20, but have fallen close to 10% since.

* 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.

* Meanwhile, China ended a long-standing tax exemption policy for some gold retailers on Saturday, potentially setting back a gold buying spree in the world’s biggest consumer market.

* Elsewhere, spot silver shed 0.3% at $47.95 per ounce, platinum gained 0.1% at $1,566.60 and palladium lost 0.8% to $1,433.50.