Gold Retreats as Fed Rate Cut Expectations Diminish
Gold prices reversed earlier gains, dropping over 1% as Federal Reserve officials cast doubt on near-term rate cuts. The precious metal's decline follows comments from policymakers emphasizing persistent inflation, reducing the likelihood of monetary easing in December.
Market-implied odds for a December rate cut have plunged to 47.6% from 69.6% just one week ago, according to CME's FedWatch tool. This shift reflects growing consensus that the central bank will maintain higher rates for longer to combat sticky price pressures.
The labor market's gradual cooling presents a policy dilemma for Fed officials. While rate cuts could support employment, premature easing risks reigniting inflationary pressures - a balance that continues to weigh on Gold markets.
