Gold prices pull back further from record highs; Fed cuts in focus
Investing.com-- Gold prices moved little in Asian trade on Wednesday after falling sharply from record highs this week, with traders now seeking more cues on when the Federal Reserve will begin trimming interest rates.
A softer-than-expected JOLTs job openings reading for October pushed up some hopes over a cooling labor market. But focus remained squarely on an upcoming nonfarm payrolls reading for November, due this Friday.
The yellow metal had started the week at record highs of over $2,100 an ounce, boosted by seemingly less hawkish comments from Fed Chair Jerome Powell, as well as increased safe haven demand following a spike in Middle East tensions.
But it had then retreated sharply from the record peaks, as uncertainty over the Fed helped the dollar recover some lost ground. Gold prices were still trading well above the $2,000 an ounce level.
Spot gold rose 0.1% to $2,021.61 an ounce, while gold futures expiring February rose 0.1% to $2,039.00 an ounce by 00:08 ET (05:08 GMT).
While investors were convinced that the Fed will raise interest rates no further, they remained uncertain over just when the central bank planned to begin trimming rates.
Fed Funds futures prices show traders pricing in an over 50% chance the Fed could begin trimming rates by as soon as March 2024. Futures also indicated an over 90% chance the Fed will keep rates on hold in December.
But the central bank has given no such indication, and has stated that rates will largely remain higher for longer, barring further, pronounced declines in inflation. U.S. inflation is still well above the Fed’s annual 2% target, while the job market remains relatively strong.
The U.S. economy also remained largely resilient in the third quarter, amid steady
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