China chip stocks fall as US considers allowing Nvidia H200 sales
Investing.com-- Gold prices steadied Friday, mostly overturning earlier losses after dovish comments from Federal Reserve President John Williams raised hopes of a potential interest rate cut in December.
At 09:10 ET (14:10 GMT), Spot gold fell 0.1% to $4,074.70 an ounce and gold futures for December rose 0.3% to $4,072.89/oz.
Williams helps gold rebound
The release of stronger-than-expected job growth for September, with the delayed jobs report, hit sentiment as traders further priced out the likelihood of a quarter-point rate cut next month.
However, confidence returned, to a certain extent, Friday after Williams said, in a speech at the Central Bank of Chile Centennial Conference, that he sees "room for a further adjustment in the near term to the target range for the federal funds rate." He noted that downside risks to employment have increased while upside risks to inflation have lessened.
Williams described current monetary policy as "modestly restrictive" and indicated a desire to move the policy stance "closer to the range of neutral."
Following Williams’ comments, traders boosted the odds of a December rate cut to more than 50%, up from nearly 37% earlier.
Earlier losses in gold, and other non-yielding assets, came on the back of a stronger dollar, as Thursday’s stronger-than-expected nonfarm payrolls added to previous convictions that the Fed will keep rates unchanged in December.
High for longer rates dent the appeal of non-yielding assets such as gold, while strength in the dollar also pressures prices of commodities priced in the greenback.
There is a barrage of key U.S. economic readings for September due next week. The prints were delayed by a prolonged government shutdown, which ended in early-November.
The shutdown is also expected to have disrupted government data prints for October, leaving the Fed flying blind into its December meeting.
Other precious metals also bounced, with spot platinum gaining 0.4% to $1,523.10/oz, while spot silver fell 1.6% to $49.495/oz, after earlier dropping over 2%.
Tech stock selloff, fiscal concerns keep haven demand in play
Gold’s overall losses were limited by some safe haven demand remaining in play, especially as a wipeout in global tech stock valuations continued this week.
The sell-off deepened on Thursday and Friday, with stronger-than-expected earnings from bellwether NVIDIA Corporation (NASDAQ:NVDA) doing little to lift spirits. Investors were also spooked by questions over Nvidia’s rising inventory levels, as well as signs of circular financing as the company pledged investments in some of its biggest customers.
Nvidia is at the heart of a massive spike in tech valuations over the past three years. But some of this valuation was seen coming undone in recent weeks, amid growing concerns over an AI stock bubble.
Concerns over stretched fiscal spending in the developed world, especially Japan, also helped spur some haven demand. Japanese Prime Minister Sanae Takaichi’s administration approved a 21.3 trillion yen ($135 billion) stimulus package on Friday, sparking increased questions over how the government will fund its rapidly increasing spending plans.
Longer-term Japanese bond yields soared to multi-decade highs this week.
Ambar Warrick contributed to this article
But losses in gold were somewhat limited as a rout in global technology stocks, on concerns over stretched valuations, drove traders towards safe havens. Concerns over stretched fiscal spending in Japan also offered some support.