Gold Pulls Back as Traders Reassess Fading Fed Rate-Cut Prospects

Gold prices slipped on Sunday as traders recalibrated expectations for U.S. interest-rate cuts, with fading confidence in a December move weighing on safe-haven demand. After weeks of strong gains fueled by political uncertainty and a record-long government shutdown, momentum in the precious metal eased as markets shifted into a more cautious wait-and-see mode.

The retreat followed a wave of messaging from Federal Reserve officials suggesting that policymakers are not ready to commit to near-term easing without access to delayed economic data. With no official inflation, jobs, or consumer-spending reports available, rate-cut projections have become more fragile — a dynamic that pressured gold as yields edged higher.

Even so, broader sentiment around bullion remains constructive. Persistent macro uncertainty, a cloudy U.S. policy outlook, and ongoing global geopolitical risks are keeping gold elevated near multi-week highs. Traders also note that the metal’s recent breakout zone remains intact, leaving room for renewed upside if rate expectations shift again or if markets experience another burst of volatility.

For now, gold appears to be entering a consolidation phase. How long that lasts may depend on incoming Fed communication, any progress toward resolving the shutdown, and early signals from alternative data sources that might hint at inflation or labour-market trends. Buyers remain active on dips — but conviction has cooled as the next policy driver hangs in the balance.