Gold Prices Decline Amid Rate Cut Speculation

Gold prices fell in early trade Tuesday as traders continue to discuss the prospect of a rate cut by the Federal Reserve in September.

At 00:08 EST (04:08 GMT), spot gold prices were down 0.24% at $2,425.55.

The precious metal had a strong performance this past month, peaking at a record $2,531.60 on August 20. However, attention is now shifting towards the upcoming U.S. non-farm payroll report expected Friday.

The report’s findings are crucial for shaping expectations regarding the Federal Reserve’s interest rate decision. The labor market data for August is pivotal in determining whether the interest rate cut will be 50 basis points or 25 basis points at the Fed’s September meeting.

Traders have slightly adjusted their expectations, with a 69% likelihood of a 25-basis-point cut and a decreased chance of a 50-basis-point reduction at 31%, according to the CME FedWatch tool.

Demand for physical gold remains subdued in major Asian markets, with new import quotas failing to boost Chinese demand.