Will the Fed Cut Rates in December? Gold Price Action Just Answered That

Gold took a hit today as traders reassessed their rate-cut bets. November gold futures dropped $21.20 to $4,056.50/oz, while silver fell 1.07% to $50.25/oz—a clear signal that December rate-cut hopes are cooling.

Here’s what spooked the market:

The September jobs report just landed with 119,000 new jobs (vs. 50,000 expected)—the biggest jump in five months. That’s hawkish data, and the Fed noticed. Meanwhile, the unemployment rate ticked up to 4.4%, but wage inflation stayed flat at 3.8% year-over-year.

The Fed’s Mixed Signals

Yesterday’s FOMC minutes showed the committee is fractured. Two members voted against October’s 25bp cut entirely—one wanted 50bp, another wanted zero cuts. Powell himself said a December cut is “not a foregone conclusion.” Translation: Don’t count on it.

What This Means for Your Portfolio

CME’s FedWatch tool now puts the odds of a December rate cut at just 39.4%. That’s down significantly. Higher for longer = gold gets headwinds (yields make bonds more attractive). The delayed jobs report timing adds uncertainty—October data won’t even be released before the December 9-10 meeting.

Bottom Line: The market’s shifting from “recession fears” to “inflation persistence.” Gold bulls need to watch whether wage pressures or labor softness win out by mid-December.