Fed Rate Cut Odds Nosedive, Gold Takes a Hit

Gold’s having a rough day. With fresh U.S. jobs data throwing a wrench in December rate cut bets, spot prices dropped to $4,056.50/oz (down 0.52%), while silver got hammered even harder at -1.07%.

Here’s what spooked the market: September added 119K jobs—way above the 50K forecast—marking the biggest monthly jump in five months. Yeah, unemployment ticked up to 4.4%, but the strong hiring numbers basically killed the “Fed’s desperate to cut rates” narrative.

The setup was already shaky. Fed Chair Powell already said December’s rate cut is “not a foregone conclusion,” and the recent FOMC minutes showed members are split: two actually voted against the October cut (one wanted 50bps, the other wanted zero). The reasoning? Inflation’s still sticky and the economy isn’t exactly screaming for help.

Cut to today: CME’s FedWatch Tool now shows only 39.4% odds of a 25bps cut on Dec 9-10. Translation—the market’s pricing in way more “wait and see” than “cut incoming.”

The gold thesis is simple: when interest rates stay higher for longer, non-yielding assets like gold become less attractive to investors hunting for returns. With rate cut expectations crumbling, we’re seeing that play out in real time.

Bottom line? Unless economic data shifts hard in the next three weeks, December’s looking more like a “pause” month than a “cut” month.