A higher dollar puts pressure on markets, causing gold prices to decline.

A stronger dollar caused gold prices to decline today as investors assessed indications that the Fed may be hesitant to lower interest rates.

Muscat: Spot gold dropped 0.3% to $2,627.60 per ounce, while U.S. gold futures declined 0.5% to $2,627.00. The dollar index increased by 0.1%, making gold less appealing to non-dollar investors.

Market sentiment has been shaped by recent core personal consumption expenditures data, which hinted at slowing inflation. This has fueled expectations that the Federal Reserve’s approach to monetary policy in 2024 could be less aggressive than anticipated.

According to the CME FedWatch tool, there is now a 64.7% probability of a quarter-point rate cut in December, reflecting tempered optimism among investors.

With U.S. markets closed for Thanksgiving, trading volumes remained light. Other precious metals mirrored gold’s decline, with silver falling 1% to $29.78 per ounce, platinum dipping 0.1% to $928.05, and palladium holding steady at $972.75.

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