Gold prices in Asian trade fell on Wednesday as the dollar rebounded, causing uncertainty over the timing of the Federal Reserve’s interest rate cuts in 2024. Spot gold, which had seen a strong run-up in the final trading days of 2023, was still trading within $100 of a record high hit in early December. The uncertainty over the timing of rate cuts led to a loss in recent gains for the yellow metal, while the dollar rebounded sharply from near five-month lows on Tuesday.
Anticipation of the Fed minutes and nonfarm payrolls, both due later in the day, kept markets on edge. While the Fed had signaled plans for rate cuts in 2024, Chair Jerome Powell provided scant cues on the timing or scale of the rate cuts. However, traders were still pricing in a nearly 70% chance of a 25 basis point rate cut in March 2024. Additionally, expectations of early rate cuts had driven a stellar rally in financial markets through most of December, particularly in the stock market.
The uncertainty surrounding the timing of the Federal Reserve’s interest rate cuts led to a decline in gold prices in Asian trade on Wednesday. Despite a strong run-up in the final trading days of 2023, the yellow metal saw a loss in recent gains due to market uncertainty. The upcoming release of the Fed minutes and nonfarm payrolls was a main point of contention for investors, with traders pricing in a nearly 70% chance of a 25 basis point rate cut in March 2024. The uncertainty over rate cuts also caused a slight fall in copper prices, with a weak economic rebound in China also contributing to the decline.
