Gold Prices Fall as Payrolls Push Bets on Less Rate Cut by Investing.com

Investing.com– Gold prices edged lower in Asian trade on Monday, retreating from record highs as strong U.S. payrolls data fueled bets on fewer interest rate cuts by the Federal Reserve.

The yellow metal fell from record highs as the dollar and U.S. Treasury yields rose on strong payrolls data that saw traders sharply reduce bets that the Fed will cut interest rates again by 50 of base points.

This week focuses on a number of signals from the Fed and the US economy, both of which are likely to weigh on interest rates.

It was down 0.2 percent at $2,647.64 an ounce, while December expiry was down slightly at $2,667.10 an ounce by 00:16 ET (04:16 GMT).

Gold hit by bets on a smaller rate cut

Bullion prices rose to record highs in September after the Fed cut rates by 50 bps and signaled the start of an easing cycle.

Friday’s stronger-than-expected data, however, fueled bets that the Fed will cut rates by just 25 bps at its November meeting. showed traders the prices with a more than 90% chance of such a scenario.

Traders were also seen positioning for a higher terminal rate for the Fed, which presents a less attractive environment for metals prices. They rose after Friday’s data.

This week’s focus is on addresses from a string of Fed officials, as well as the Fed’s September meeting, for more clues on rates.

Inflation data due later in the week is also likely to weigh on the outlook for rates.

Other precious metals followed gold’s decline. was down 0.5% at $997.05 an ounce, while it was down 0.1% at $32.360 an ounce.

Copper settles with stimulus from China in focus

Among industrial metals, copper prices steadied on Monday after swinging last week, although they remained relatively bullish on the prospect of more stimulus in top importer China.

The London Metal Exchange benchmark was flat at $9,972.0 a tonne, while on the month it rose 0.2% to $4.5728 a pound.

Copper was initially supported by China, which announced more stimulus at the end of September. But trading volumes in the red metal fell in the past week due to China’s Golden Week holiday.

Chinese markets are due to reopen on Tuesday, while the government is also due to hold a briefing on more stimulus measures.