Gold Prices Hover Around $3,960 an Ounce

SadaNews - Gold prices dropped after three Federal Reserve policymakers refrained from supporting a new interest rate cut next month, while the US dollar index continued to trade near its highest levels in several months.

The precious metal fell and was recorded near $3,960 an ounce after swinging between gains and losses on Monday.

Federal Reserve board member Lisa Cook stated that she believes the risk of a weak labor market is greater than the risk of inflation rising again, but she refrained from endorsing a new interest rate cut next month. Her remarks were in line with those of her colleagues Mary Daly and Austan Goolsbee.

Price Fluctuations After Record Gains Last Month

Gold had reached a record level in the middle of last month before subsequently dropping due to concerns that its rise was too rapid.

Traders are now trying to assess whether the upward trend will resume, amidst anticipation of US monetary policy, as looser policies make gold, which does not yield a return, more attractive.

After implementing two consecutive interest rate cuts recently, policymakers will meet next month for their last scheduled meeting of the year.

Kyle Roda, an analyst at Capital.com Inc, said: "There is a risk that the Fed may try to temper expectations of a rate cut a bit, which could drive yields and the dollar higher and put pressure on gold prices."

At the end of last month, Federal Reserve Chair Jerome Powell warned investors against assuming that the US central bank would proceed with another cut in December, in remarks that seemed aimed at curbing market expectations.

Movements of Precious Metals in Asian Markets

Gold fell by 0.5% to $3,981.86 an ounce at 9:27 AM in Singapore, while the Bloomberg Spot Dollar Index rose after ending Monday's trading at its highest level since July. Silver and palladium prices also fell, while platinum remained relatively unchanged.

Gold finished Monday's trading with little change, after China announced on Saturday that some retailers would not be able to fully benefit from the VAT discount on inputs when selling certain products.

This decision raised uncertainty about demand prospects, as it remains unclear how the new regulation will be implemented in practice.