Gold Prices Dip Amid Strong U.S. Payrolls Data

Gold prices fell slightly in Asian trade on Monday, continuing a decline from record highs as strong U.S. payrolls data strengthened bets on a smaller interest rate cut by the Federal Reserve.

The yellow metal dropped from record highs as the dollar and U.S. Treasury yields increased following the strong payrolls data, leading traders to scale back expectations of a 50 basis points rate cut by the Fed.

This week's focus is on various signals from the Fed and the U.S. economy, which are likely to influence interest rates.

Spot gold fell 0.2% to $2,647.64 an ounce, while December gold futures decreased slightly to $2,667.10 an ounce by 00:16 ET (04:16 GMT).

Gold Hit by Bets on Smaller Rate Cut

Bullion prices surged to record highs in September after the Fed cut rates by 50 bps and initiated an easing cycle. However, stronger-than-expected nonfarm payrolls data from Friday increased speculation that the Fed may only cut rates by 25 bps in its November meeting.

CME Fedwatch indicated that traders are now pricing in over a 90% chance of such a scenario. Additionally, traders appear to be positioning for a higher terminal rate for the Fed, creating a less favorable environment for metal prices. The dollar rose sharply following Friday's data.

This week’s attention will also be on comments from several Fed officials and the minutes from the Fed's September meeting for additional clues on interest rates, along with the consumer price index inflation data expected later in the week.

Other precious metals also mirrored gold's declines. Platinum futures decreased 0.5% to $997.05 an ounce, while silver futures fell 0.1% to $32.360 an ounce.

Copper Steadies with China Stimulus in Focus

In industrial metals, copper prices steadied on Monday after experiencing significant fluctuations over the past week, though they remained relatively positive due to anticipated stimulus in top importer China.

Benchmark copper futures on the London Metal Exchange stabilized at $9,972.0 a ton, while one-month copper futures rose 0.2% to $4.5728 a pound.

Copper prices initially rose following China's announcement of more stimulus measures in late September. However, trading volumes diminished over the past week, likely due to the week-long Chinese Golden Week holiday.

Chinese markets are set to reopen on Tuesday, and the government is also expected to hold a briefing regarding additional stimulus measures.