Gold prices continued to decline on Tuesday, marking a fourth consecutive day of losses, as the US dollar strengthened and expectations for a Federal Reserve interest rate cut next month weakened.

Spot gold fell 0.8% to $4,011.85 per ounce, while US gold futures dropped 1.6% to $4,010.90 per ounce.

Analysts said the decline was driven by a stronger dollar, reduced expectations of a rate cut, and profit-taking by investors. Gold has dropped around 8% from its record high of $4,381 per ounce in October.

The US Dollar Index recently reached its highest levels since mid-2024, making gold more expensive for buyers using other currencies. Meanwhile, the probability of a Federal Reserve rate cut in December has fallen from nearly 100% to just 42%. Fed Vice Chair Philip Jefferson recently said the central bank needs to “proceed slowly” with further rate cuts.

Analysts also described the recent decline as mainly technical, with UBS noting there is no fundamental reason for the sell-off. Gold had surged 47-54% year-to-date through October, prompting profit-taking.

Market participants are closely watching US economic data this week, particularly Thursday’s employment report, which could influence the Fed’s decision on interest rates. Technical support for gold is seen around the $4,000 level.

Despite the recent losses, many experts remain positive about gold’s long-term outlook. Central banks continue to buy gold as they diversify away from US dollars. Goldman Sachs projects gold could reach $4,900 per ounce by December 2026, while Bank of America forecasts $5,000 per ounce.

Other precious metals also declined on Tuesday. Silver fell 1.1% to $49.63 per ounce, platinum slipped 1.3% to $1,514.35, and palladium dropped 1.2% to $1,369.78.

The Federal Reserve’s meeting on December 10 will be closely watched to see whether gold continues to fall or starts to recover. (ILKHA)