
First reported on MINING.com
30 Second Briefing
Gold prices fell over 3% on Friday, reaching as low as $4,034.54 per ounce, amid a market sell-off triggered by hawkish comments from US Federal Reserve officials that reduced the likelihood of a December rate cut. Gold futures experienced a sharper decline, with three-month contracts dropping 3.7% to $4,039.40 an ounce. The probability of a 25 basis-point rate cut next month decreased to 53%, down from 64% earlier in the week, as indicated by CME Group’s FedWatch tool.
Technical Brief
- Gold spot prices dropped over 3% to $4,034.54 per ounce amid a market sell-off driven by US Federal Reserve comments.
- Gold futures experienced a sharper decline, with three-month contracts falling 3.7% to $4,039.40 an ounce.
- The likelihood of a 25 basis-point rate cut in December decreased to 53%, down from 64% earlier in the week.
- Fed officials' hawkish signals reduced expectations for additional monetary easing, impacting gold's appeal.
- Despite the recent dip, gold remains up nearly 60% this year, driven by central bank purchases and investor demand.
- Market analyst Fawad Razaqzada noted that margin calls and liquidations contributed to gold's decline in a risk-off environment.
- Investors are navigating without official economic data ahead of the next policy meeting, following a prolonged government shutdown.
- The pullback in gold prices comes despite its role as a hedge against fiscal uncertainty in major economies.
Context From Recent Coverage
- The recent 3% drop in gold prices contrasts sharply with the 60% increase observed earlier this year, highlighting significant volatility in the gold market, as also seen in the related article on East Africa Metals where illegal mining was driven by rising gold prices.
- Despite the current selloff, market expectations for a 25 basis-point rate cut remain at 53%, suggesting potential future support for gold prices as lower interest rates typically make non-yielding assets like gold more attractive.
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