Gold subdued as DXY rebounds and December Fed cut bets fade

LONDON (November 17) Gold (XAU/USD) kicks off the week on a subdued note, consolidating losses after a two-day slide that followed last week’s push to over a three-week high. At the time of writing, XAU/USD is trading around $4,080 with gains capped by a firmer US Dollar (USD) and diminishing bets on a December interest rate cut by the Federal Reserve (Fed).

Traders are refraining from taking aggressive directional positions ahead of a pivotal week, with markets bracing for US economic data that was delayed by the government shutdown. The spotlight is firmly on the September Nonfarm Payrolls (NFP) report, which is expected to provide the first clear update on labor market conditions in weeks.

As attention shifts to long-delayed economic releases, Gold stays sensitive to the Fed’s cautious stance, with the FOMC Minutes also due later this week. The metal may remain range-bound, as lingering uncertainty around the Fed’s next steps should help cushion the downside.

Market movers: Fed hawks trim December rate-cut bets as data backlog looms

• The US Dollar Index (DXY), which tracks the Greenback's value against a basket of six major currencies, is trading around 99.42, extending gains for the second straight day after slipping to two-week lows last week.
• Gold is also facing headwinds as the end of the US government shutdown and easing global trade tensions surrounding US tariffs have reduced its safe-haven appeal. However, persistent geopolitical and economic risks keep the broader outlook tilted to the upside.
• The Bureau of Labor Statistics (BLS) reported on Friday that key releases delayed by the government shutdown now have revised dates, with the September Employment Situation report rescheduled to November 20 and September Real Earnings set for November 21, both at 13:30 GMT. US Labor Secretary Chavez-Deremer also noted that the agency was unable to fully gather the October Consumer Price Index (CPI) data, raising the possibility that the report may never be published.
• Fed rate-cut expectations have cooled after hawkish commentary last week, with officials stressing that inflation remains their main concern despite softer labor market signals. According to the CME FedWatch Tool, the probability of a December rate cut has dropped to around 44%, down sharply from 94% a month ago.
• The US economic calendar for Monday includes the NY Empire State Manufacturing Index for November, followed by speeches from New York Fed President John C. Williams, Fed Vice Chair Philip Jefferson, Fed Governor Christopher Waller and Minneapolis Fed President Neel Kashkari.

FXStreet