Rising dollar and fading rate cut hopes send global gold markets into a testing period ahead of the Fed’s key policy meeting.
Global gold prices fell sharply on Monday as the U.S. dollar strengthened, triggering a broader selloff across financial and commodity markets. The precious metal now faces three pivotal weeks that could reshape its short-term trajectory.
Gold spot prices dropped 1.5% in early trading on November 17, settling at $4,019 per ounce - equivalent to $128,300 per tael at official exchange rates, or roughly $135,000 on the black market.
Domestically, as of 10:16 AM on November 18, SJC gold bars were quoted at $147.3–149.3 million per tael (buy–sell), falling by $1.7 million on both ends compared to the previous day. Gold jewelry also saw steep declines.
The drop mirrored broader downward momentum in global markets. U.S. equities sank overnight, with the Dow Jones Industrial Average falling over 550 points (-1.2%) as tech stocks took a hit. Investors are now eyeing key economic reports due this week, including the September U.S. jobs report.
Commodities followed suit, dragged down by a stronger U.S. dollar. Silver fell from nearly $51 to $49.60 per ounce, while several other metals also declined.
The greenback’s rebound came after a prolonged downtrend earlier in the year, triggering broad-based selling across risk assets.
Hawkish Fed dims rate cut hopes, puts gold under pressure
Investors are scaling back expectations for a December rate cut by the U.S. Federal Reserve (Fed) as top officials issue cautious signals in response to persistent inflation risks.
The Fed’s next policy meeting is set for December 10. While the market once priced in over a 90% chance of a 25 basis point cut following September’s easing, those odds dropped to 65% last week and just 42.9% by 9 AM on November 18 (Vietnam time). In contrast, markets now place a 57.1% chance that the Fed will hold rates steady at 3.75%–4%.
The rising dollar, driven by fading rate cut hopes, is weighing heavily on all commodities priced in USD.
Further pressure comes from concerns of a tech bubble burst, with major U.S. stock indices trading near record highs. The crypto market has also suffered sharp losses: Bitcoin fell to $91,000 from its October 7 peak of $125,000.
But the biggest drag on gold remains the shift in Fed rate expectations.
Three intense weeks ahead for gold investors
With 22 days to go until the Fed’s next meeting, investors are entering a high-stakes window where every macroeconomic release could tilt market sentiment.
Upcoming data includes the September U.S. jobs report on November 20 and the minutes from the last Fed meeting, due the evening of November 18 (Vietnam time).
In the past two weeks, four Fed policymakers - Governor Christopher Waller, New York Fed President John Williams, and others - have expressed skepticism about further cuts. Fed Chair Jerome Powell also emphasized that no decision had been made on December’s policy action.
Compounding concerns, the New York Empire State Manufacturing Index jumped to 18.7 in November - its highest in a year - far exceeding expectations of 6.1 and October’s 10.7 reading.
This suggests the U.S. economy may be stronger than previously thought, despite recent fears of a government shutdown. A resilient manufacturing sector could translate into robust labor market performance.
This upbeat data has significantly dented hopes for a rate cut next month. However, the Fed will likely await additional official data before its December 10 verdict. Until then, investors are set for three weeks of data-driven speculation, parsing every release from the Trump administration.
Gold risks breaching key psychological support
Traders warn that a break below the $4,000/oz level could trigger further declines, with some projecting a slide toward $3,800.
Several gold ETFs have already begun selling off holdings, adding more downward pressure to the market.
In the near term, investor focus is squarely on the upcoming jobs report on November 20 and the non-farm payroll data due the morning of November 21.
Demand from central banks and global uncertainty offer support
Despite short-term headwinds, gold remains supported by robust demand from central banks amid a global shift away from reliance on the U.S. dollar and rising geopolitical tensions.
Doubts over the Fed’s independence and the U.S. dollar’s long-term stability may also bolster gold’s appeal as a safe-haven asset.
Speaking to Kitco News, Dilin Wu, a research strategist at Pepperstone, projected that gold will likely trade within a $4,000–4,250 per ounce range in the short term.