Gold backs off two-month high before US jobs data

Gold prices fell in the European market on Tuesday for the first time in six days, pulling back from their highest levels in two months amid active correction and profit-taking operations, while losses were capped by the continued weakness of the US dollar against a basket of global currencies.

Markets are awaiting later today the release of key US labor market data, especially the October jobs report, which was previously delayed due to the US government shutdown. The report is expected to provide strong signals about the future path of Federal Reserve monetary policy in 2026.

Price Overview

• Gold prices today: Gold declined by about 0.8% to $4,271.67, from an opening level of $4,305.35, after recording a session high of $4,317.90.

• At Monday’s settlement, gold prices rose by 0.15%, marking a fifth consecutive daily gain, and had earlier reached a two-month high at $4,353.59 per ounce during Friday’s trading.

The US Dollar

The US Dollar Index fell by 0.1% on Tuesday, extending its losses for the second consecutive session and nearing a two-month low, reflecting continued weakness in the US currency against a basket of global currencies.

The dollar has remained under pressure since last week’s Federal Reserve meeting, as the outcome was less hawkish than markets had anticipated, reviving bets on the continuation of the federal rate-cut cycle in 2026.

US Interest Rates

• According to the CME FedWatch Tool, pricing for keeping US interest rates unchanged at the January 2026 meeting currently stands at 73%, while the probability of a 25-basis-point rate cut is priced at 27%.

• Investors are currently pricing in two US rate cuts over the course of next year, while Federal Reserve projections point to only one 25-basis-point cut.

• To reassess these expectations, investors are closely monitoring upcoming US economic data, along with comments from Federal Reserve officials.

• The October US jobs report is due later today, and is expected to offer strong clues about the pace of growth in the world’s largest economy during the fourth quarter, which was heavily affected by the longest government shutdown in US history.

Gold Outlook

Tim Waterer, Chief Market Analyst at KCM Trade, said that the US dollar remains weak, which helps keep gold prices in an upward bias, as markets believe the Federal Reserve may be underestimating the number of potential rate cuts next year.

Waterer added that if labor market data confirms that employment remains a weak spot, gold could benefit, as this would strengthen the case for an early rate cut in 2026.

SPDR Gold Trust

Gold holdings at SPDR Gold Trust, the world’s largest gold-backed ETF, fell by 1.43 metric tons on Monday, bringing total holdings down to 1,051.69 metric tons, retreating from 1,053.12 metric tons, which was the highest level since October 20.