As investors evaluated the possibility of a Federal Reserve interest rate decrease in December ahead of more postponed U.S. data releases this week, gold prices increased from a one-week low on Tuesday, helped by weak U.S. employment statistics.
After falling to its lowest level since November 10 earlier in the session, spot gold was up 0.6% at $4,068.05 per ounce as of 12:01 a.m. ET (1701 GMT). December delivery U.S. gold futures dropped 0.2% to $4,068.40 per ounce.
The number of Americans collecting unemployment benefits reached a two-month high in mid-October, according to data released on Tuesday. In the week ending October 18, the number of claims for unemployment benefits increased to 1.9 million. According to the CME FedWatch tool, markets currently expect a 50% chance of a rate drop at the December meeting, up from 46% earlier in the day but lower than 67% last week.
When interest rates are lower, gold, a non-yielding asset, typically performs well. As investors reduced their wagers on another interest rate decrease this year, prices dropped more than 3% on Friday and 1% on Monday. Due to the U.S. government shutdown, markets are now awaiting September jobs data on Thursday and minutes from the Fed’s most recent meeting, which are due on Wednesday.
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