Gold price prediction: Gold rate may remain volatile as all eyes on U.S Fed interest rate cut decision

Gold is expected to remain volatile as signs of some ease in global trade order, fading expectations of a December rate cut by the US Federal Reserve and a stronger dollar index. U.S. gold futures for December delivery settled 0.5 per cent higher at $4,079.5 per ounce.

New York Fed President John Williams on Friday said the U.S. central bank could still trim interest rates in the near term, without jeopardizing its inflation goal. The comments "are certainly supportive ... it did give the gold market bulls some friendly fodder early today," said Jim Wyckoff, senior analyst at Kitco Metals.

Traders now see a 74 per cent chance of a rate cut at the Fed's next meeting, compared to 40 per cent earlier in the day.


The delayed jobs report showed a mixed labor market picture, with nonfarm payrolls rising by 119,000 in October, well above forecasts for a 50,000 gain, while the unemployment rate climbed to a four-year high.

Gold, a non-yielding asset, tends to do well in low-interest-rate environments.

Meanwhile, other Fed members maintained a hawkish stance, with Dallas Federal Reserve President Lorie Logan calling for leaving the policy rate on hold "for a time."

Traders are also keeping a close eye on U.S. stock markets as "if the stock market rallies stronger today, that's probably going to put downside pressure on gold because of the keener risk appetite in the marketplace," Wyckoff added.

Wall Street's main indexes gained as traders boosted bets on an interest rate cut by the Fed next month following remarks from policymakers.

FAQs

Q1. What do we know about U.S. gold futures?

A1. U.S. gold futures for December delivery settled 0.5 per cent higher at $4,079.5 per ounce.

Q2. How does Gold behave?

A2. Gold, a non-yielding asset, tends to do well in low-interest-rate environments.