Gold prices suffer profit taking ahead of likely Fed cut; PCE inflation due

Investing.com-- Gold prices edged lower Thursday, weighed by profit-taking even as investors grew more confident that the Federal Reserve will cut interest rates next week.

At 08:30 ET (13:30 GMT), Spot gold fell 0.2% to $4,196.00 an ounce and U.S. Gold Futures for February delivery slipped 0.2% to $4,225.75 an ounce.

Spot gold has soared almost 60% so far this year, but traders have taken some of these profits ahead of next week’s Federal reserve meeting.

U.S. data support Fed easing bets

Markets are pricing in a nearly 90% chance of a 25-basis-point rate cut at the Fed’s December 9–10 meeting, according to the CME FedWatch tool.

The latest data in the U.S. bolstered sentiment toward a rate cut. Private payrolls shrank by 32,000 in November according to the ADP employment report -- a notable downturn from October’s revised 47,000-job gain and far short of expectations for positive growth.

Meanwhile, the Institute for Supply Management (ISM) services index showed modest expansion in November, but underlying data suggested cooling.

Investors now await a more definitive signal from the delayed September Personal Consumption Expenditures Price Index (PCE), the Fed’s preferred gauge of inflation, due Friday, to better confirm how aggressive any rate cut might be.

Adding to the uncertainty are media reports that the Trump administration abruptly cancelled interviews with several candidates to succeed Jerome Powell, strengthening speculation that Kevin Hassett could emerge as the next Fed chair.

Those reports have bolstered expectations of a more dovish Fed stance under new leadership, a development that could favor non-yielding assets such as gold.

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Gold has 15%-30% upside - WGC

The World Gold Council (WGC) still sees further strong gains ahead, as investment demand, particularly via gold exchange-traded funds (ETFs), would remain a key driver, offsetting weakness in other areas such as jewellery or technology.

"The combination of falling yields, elevated geopolitical stress and a pronounced flight-to-safety would create exceptionally strong tailwinds for gold supporting a sharp move higher. Under this scenario gold could surge 15-30% in 2026 from current levels," the WGC report said.

Metal markets dip

Other precious and industrial metals traded lower on Thursday as investors squared positions ahead of the Fed decision.

Silver futures fell 1.4% to $57.828 per ounce, while Platinum Futures dropped 0.2% to $1,655.60/oz.

Benchmark Copper Futures on the London Metal Exchange edged down 0.5% to $11,421.25 a ton and U.S. Copper Futures dropped 0.6% to $5.3565 a pound.

Ayushman Ojha contributed to this article