Gold Declines as Dollar Strengthens and Rate‑Cut Expectations Fade

Gold retreated on Monday, with the precious metal falling about 0.8% during trading. The decline was driven by a stronger U.S. dollar and fading market expectations for a rate cut at the Federal Reserve’s December meeting, following a series of hawkish comments from Fed officials.

Adding to the pressure, the European Commission raised its 2025 Eurozone GDP forecast to 1.3%, up from 0.9% previously. The improved outlook encouraged risk appetite among investors, reducing demand for gold as a safe haven.

Since hitting record highs in mid‑October, gold and silver have faced selling pressure from profit‑taking and long liquidation. This has been reflected in falling holdings of gold and silver ETFs, which had reached three‑year highs on October 21.

Despite recent weakness, several factors have supported precious metals in recent months. Chief among them is strong central bank demand.

Recent data showed the People’s Bank of China increased its gold reserves to 74.09 million ounces in October, marking the twelfth consecutive month of accumulation.

The World Gold Council also reported that global central banks purchased 220 metric tons of gold in the third quarter, a 28% increase from the second quarter.

Even under current pressure, precious metals continue to attract safe‑haven demand amid uncertainty over U.S. tariffs, geopolitical risks, ongoing central bank buying, and political challenges to the Fed’s independence.