By Noel John
(Reuters) -Gold prices dropped more than 1% on Thursday, pressured by a firm dollar and fading expectations of a Federal Reserve rate cut in December, as investors waited for a delayed U.S. jobs report later in the day.
Spot gold was down 0.6% at $4,055.20 per ounce at 1104 GMT, recovering some of its earlier 1% fall. U.S. gold futures for December delivery fell 0.7% to $4,053.80 per ounce.
The dollar index firmed near a two-week high, making gold more expensive for holders of other currencies. [USD/]
“Dollar firmness is weighing on gold but the price choppiness is typical for this time of year where we have some good two-way trade with profit-taking and book-squaring meeting early investments ahead of the new year,” said independent analyst Ross Norman.
Minutes from the Fed’s October meeting, released on Wednesday, showed it cut interest rates even as policymakers cautioned that doing so could risk entrenched inflation and a loss of public trust in the U.S. central bank.
Traders are now focused on the September jobs report, delayed due to the government shutdown, for clues on the Fed’s next move. September nonfarm payrolls likely increased by 50,000 jobs, more than double August’s 22,000 gain, a Reuters survey showed.
The Fed will still lack much of the data at its policy meeting on December 10, as the next jobs report has been delayed until December 16.
Traders now see nearly a 34% chance for a rate cut next month, down from 49% on Wednesday, CME Group’s FedWatch tool showed.
Non-yielding gold tends to do well in a low-interest-rate environment and during times of economic uncertainty.
UBS raised its 2026 mid-year gold target price by $300 to $4,500 per ounce, on expectations of Federal Reserve rate cuts, persistent geopolitical risks, and strong central bank and ETF demand.
Spot silver fell 1.4% to $50.66 per ounce, platinum was down 0.5% at $1,538.85 and palladium rose 1.1% to $1,394.74.
(Reporting by Noel John in Bengaluru; Editing by Kirsten Donovan)
