Gold Retreats from Six-Week High as Investors Eye US Economic Data and Fed Cues

By / / Breaking News

Key Takeaways

  • Gold prices edged lower on Tuesday, December 2, 2025, falling to approximately $4,222.07 per ounce, primarily due to profit-taking after reaching a six-week high.
  • The yellow metal's decline was also influenced by the persistent impact of higher Treasury yields, despite the 2-year yield easing slightly and the 10-year yield holding steady on the day.
  • Investors are keenly awaiting critical US economic figures, including November ADP employment data and delayed September PCE inflation figures, alongside Federal Reserve Chair Jerome Powell's remarks, for insights into future interest rate policy.
  • Markets are currently pricing in a high probability of an 87-88% chance of a 25 basis point (bps) Fed rate cut in December, which could provide support for non-yielding gold.

Gold prices experienced a slight downturn on Tuesday, December 2, 2025, as the precious metal retreated from its recent six-week peak. Spot gold was trading around $4,222.07 per ounce, marking a 0.22% decrease from the previous day, with US gold futures (GC=F) for December delivery also dipping by 0.4% to $4,256.30 per ounce. This movement is largely attributed to investors engaging in profit-taking following gold's strong performance.

The precious metal's sensitivity to interest rate expectations and bond yields continues to be a significant factor. While the yield on the US 2-year Treasury Note (^TN2YR) eased slightly to 3.54% on Tuesday, and the US 10-year Treasury Note (^TN10YR) yield held steady at 4.09% after a prior surge, the overall context of higher yields tends to exert downward pressure on non-yielding assets like gold.

Market participants are now closely focused on a series of upcoming US economic data releases and statements from Federal Reserve officials. Key among these are the November ADP employment figures, expected on Wednesday, and the delayed September Personal Consumption Expenditures (PCE) data, the Fed's preferred inflation gauge, due on Friday. These reports are crucial for providing further clues on the central bank's monetary policy direction.

Adding to the anticipation, Federal Reserve Chair Jerome Powell is scheduled to deliver remarks later today, which investors will scrutinize for any indications regarding the future trajectory of interest rates. The market is currently assigning a high probability of 87% to 88% to a 25 basis point interest rate cut by the Fed in December, an expectation bolstered by recent dovish comments from Fed officials and signs of weakening economic data, including the US manufacturing sector contracting for the ninth consecutive month in November. The conclusion of the Fed's quantitative tightening program on December 1 also signals a potentially more accommodative stance.

Gold has demonstrated remarkable resilience throughout 2025, with consistent monthly gains positioning it for its best annual performance since 1979. This robust performance has been supported by strong central bank buying and significant inflows into gold exchange-traded funds (ETFs) such as the SPDR Gold Shares (GLD). The metal typically thrives in environments characterized by lower interest rates, as it becomes more attractive compared to yield-bearing assets.

Disclaimer: This article is for informational purposes only and does not constitute financial advice. We are not financial professionals. The authors and/or site operators may hold positions in the companies or assets mentioned. Always do your own research before making financial decisions.
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