WASHINGTON (dpa-AFX) - Gold prices moved lower on Tuesday as investors lowered their bets for an additional interest rate cut by the U.S. Federal Reserve in December as recent comments by Fed officials went against the need for further reductions.
Front Month Comex Gold for November delivery fell by $7.00 (or 0.17%) to $4,061.30 per troy ounce.
Front Month Comex Silver for November delivery lost by 17.50 (or 0.35%) to $50.450 per troy ounce.
In the U.S., based on previously released jobs data, traders were betting on another rate cut by the U.S. Federal Reserve in December.
Though the shutdown halted the release of key economic numbers, private reports supported expectations favoring a near-certain rate cut in December.
However, after recent statements by Fed officials suggesting another rate cut is unnecessary in the current economic condition, expectations have softened among traders.
Gold, considered a safe-haven asset, performs well in low-interest-rate environments, making it easier to purchase for foreign buyers.
On Monday, Fed Vice Chair Philip Jefferson said that the Fed should proceed 'slowly' with further rate reductions.
Today, U.S. Department of Labor data revealed that for the week ending October 18, initial jobless claims in the U.S. totaled 232,000, continuing jobless claims in the U.S. rose to 1.957 million, and 4-week moving average of jobless claims came in at 58,000.
The latest weekly report from Automatic Data Processing showed that for the four weeks ending November 1, U.S. private employers cut 2,500 jobs on an average following a decline of 11,250 jobs in the previous period.
Markets are anticipating Wednesday's release of the minutes of the Fed's last meeting as well as the September non-farm payrolls report scheduled to be released on Thursday to get a clearer picture on the employment scenario.
On the geopolitical front, even as Ukraine's President Volodymyr Zelenskyy is working to resume talks in Istanbul over ending the war with Russia, Russian troops are moving to take over Zaporizhzhia, a southeastern Ukrainian city.
Yesterday, the U.N. Security Council endorsed U.S. President Donald Trump's Gaza Peace Plan. Following the move, Israel has called for the expulsion of the Hamas from Palestine. Stating that the resolution fails to meet the humanitarian demands of Palestinian people, Hamas dismissed the Council's decision.
Traders feel that the Fed's decision on interest rates in December would guide the trajectory of the dollar in the short-term and consequently gold prices.
According to CME Group's FedWatch Tool, investors are betting on a 48.9% chance of a 25-basis-point interest rate cut at the Federal Reserve's December 9-10 meeting.
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