FX.co ★ Gold Holds Around $3,980

Gold prices hovered around $3,980 per ounce on Thursday, maintaining a narrow band close to a four-week low. This follows as investors continue to downplay the likelihood of further interest rate cuts in the US. In October, US private payrolls exceeded expectations with a rise of 42,000, surpassing the anticipated 25,000 increase. Additionally, the ISM Services PMI reached an eight-month high. These figures have reinforced the view that there is limited room for more rate cuts, given that inflation remains above target and the government shutdown has postponed crucial labor market data. This situation is compounded by a hawkish stance from several Federal Reserve officials, echoing Chair Powell’s recent comments that the latest rate cut might be the last for the year. Nevertheless, some policymakers have emphasized the need for interest rates to decline over time. Further contributing to the downward trend, the sentiment towards riskier assets has improved, diminishing the appeal of gold as a safe haven.