Gold rebounds as weaker dollar offsets December Fed hike bets

Gold moved higher on Monday, according to Investing.com, as a weaker US dollar offset expectations that the Federal Reserve could raise interest rates in December. A softer dollar makes dollar-priced gold cheaper for buyers using other currencies, while rate hike bets usually work against a metal that pays no interest.

In Asia, Investing.com reported that stocks bounced as jitters over artificial intelligence and the Middle East receded. The same report described the dollar as firm on Fed bets, so the currency's tone looked mixed across the morning's coverage. The sources do not give price levels, so the size of the moves is not clear.

Both reports point to the same theme: expectations for US monetary policy are guiding the dollar, gold and risk appetite at the start of the week.

Why it matters for traders

Expectations for central banks and interest rates are a major driver of the dollar and of gold. When the market prices in a possible rate hike, the dollar often finds support, but Monday's mixed signals show other forces can pull the other way. Traders who follow the US Dollar Index will want to see whether the dollar's tone stays split.

What to watch next

• US CPI m/m on 10 November at 13:30 UTC, with a forecast of 0.3% against a previous 0.6%.
• US Core CPI m/m at the same time, forecast at 0.2% against a previous 0.3%.
• Any change in market pricing for a December Fed rate hike after the inflation data.
• Whether the recovery in Asian equities holds as the AI and Middle East concerns stay in the background.