Gold prices edged lower during Tuesday's Asian session as a strengthening United States dollar and easing safe-haven demand weighed on the precious metal, though geopolitical risks and concerns over a prolonged U.S. government shutdown helped limit losses.
By 4:10 pm AEDT (5:10 am GMT), spot gold was trading 0.5% lower at US$3,982.73 per ounce, retreating from the $4,000 psychological threshold after facing renewed selling pressure during the Asian session.
The dollar hovered near a three-month high as investors scaled back expectations for further rate cuts following the U.S. Federal Reserve’s latest meeting.
While the Fed delivered its second rate reduction of the year last week, Chair Jerome Powell said another move was “not a foregone conclusion”, tempering dovish bets.
According to the CME Group FedWatch Tool, markets now assign a 65.1% probability of another rate cut in December, down from more than 90% before Powell’s comments.
Still, worries over the potential economic fallout from an extended U.S. government shutdown could act as a drag on the dollar in the coming weeks.
