Gold is below $4,000 with the strength of the US currency and expectations of a rate cut

Gold was trading at less than $4,000 per ounce again today, as the dollar remained at its highest levels in more than three months, while declining chances of another US interest rate cut in December and easing trade tension between the United States and China weakened demand for the yellow metal.

Gold in spot transactions fell 0.2 percent to $3,992.23 an ounce by 0343 GMT.

US gold futures for December delivery fell 0.3 percent to $4,001.40 an ounce.

The dollar stabilized and hovered near the highest level in three months, as the division of the Federal Reserve (the US central bank) prompted traders to reduce bets on lowering interest rates.

“The strength of the dollar represents a thorn in the side for gold, as traders recalculate the possibility of another interest rate cut by the end of the year,” said Tim Waterer, chief market analyst at KCM Trade.

The Federal Reserve lowered interest rates last week for the second time this year, but Chairman Jerome Powell said that making another cut in 2025 “is not a given.”

According to CME’s FedWatch tool, the market now expects 65 percent of another interest rate cut in December, down from more than 90 percent before Powell’s comments.

Non-yielding gold thrives at low interest rates and times of economic uncertainty.

This week, investors are looking to economic data, such as ADP data on employment in the United States, for signals about lowering interest rates.

“If we see another seemingly bleak read on ADP data, that could give gold a foothold to start recovering again,” Waterer said.

Gold has risen 53 percent since the beginning of the year, but has fallen by more than eight percent from a record high level recorded on October 20.

US President Donald Trump said last week that he agreed to reduce tariffs on China in exchange for concessions from Beijing.

As for other precious metals, silver rose in spot transactions 0.1 percent to $48.12 per ounce, platinum increased 0.1 percent to $1,566.60, and palladium fell 1 percent to $1,430.31.