Gold prices slipped on Thursday as the U.S. dollar strengthened, while investors assessed a flurry of economic data showing stalled inflation progress, suggesting the Federal Reserve might tread cautiously on further interest rate cuts.
Spot gold fell 0.3% to $2,627.60 per ounce.
U.S. gold futures shed 0.5% to $2,627.00.
The dollar index was up 0.1%, reducing gold’s appeal for holders of other currencies.
The market is focusing on the Fed’s rate cuts, with the latest Core Personal Consumption Expenditures (PCE) data suggesting slowing inflation, leading to expectations that the Fed’s policy next year might be less dovish than previously expected, said Kelvin Wong, OANDA’s senior market analyst for Asia Pacific.
Meanwhile, the Fed’s struggle to bring inflation back to its 2% target, combined with the possibility of higher tariffs under the upcoming Trump administration may constrain the U.S. central bank’s ability to implement rate cuts next year.
Markets now see a 64.7% chance of a quarter-point rate cut in December, as per the CME group’s FedWatch tool.
Elsewhere, Mexican President Claudia Sheinbaum warned of retaliation if Trump enforces a 25% tariff, citing potential U.S. job losses and higher consumer prices.
Gold is regarded as a safe-haven investment during periods of economic or geopolitical instability, including trade wars.
Trading is expected to be thin with U.S. markets closed on Thursday for Thanksgiving holiday.
In the short term, particularly over the next few days to two weeks, gold could come under further pressure. However, the longer-term bullish trend for gold remains intact, Wong added.
SPDR Gold Trust GLD, the world’s largest gold-backed exchange-traded fund, said its holdings fell 0.10% to 878.55 metric tons on Wednesday.
Spot silver fell nearly 1% to $29.78 per ounce, platinum 0.1% to $928.05 and palladium was steady at $972.75.