World gold prices decreased slightly in the trading session on December 3 as investors took profits after a strong increase, while US bond yields increased and the market became cautious ahead of a series of important economic data to be released. However, expectations of the US Federal Reserve (Fed) cutting interest rates soon still help the precious metal maintain a high price range.
According to Business Times Singapore, spot gold prices are around $4,207/ounce in the Asian market. The pullback comes after gold hit a six-week peak in the first session of the week, under technical profit-taking pressure and the impact of the increase in US 10-year Treasury yields - a factor that often reduces the attractiveness of non-interest-bearing assets such as gold.
Although prices have been adjusted, the general sentiment in the market is still positive. Recent figures show that the US economy is slowly cooling down, along with dovish signals from Fed officials, which have reinforced beliefs that the US central bank could start a rate cut cycle this December.
According to CME Group's FedWatch tool, investors are currently pricing in an 87% chance that the Fed will cut interest rates by another 0.25 percentage points at the upcoming meeting. The market is paying attention to the ADP private sector employment report for November and the personal consumption expenditure (PCE) price index for September - the Fed's preferred inflation measure - due this week. Lower interest rates are often seen as a supporting factor for gold, as this precious metal does not yield like other financial assets.
Peter Grant, Vice President and senior metals strategist at Zaner Metals, said that the current price decline is largely due to short-term profit-taking. This could just be a technical correction. The market's focus is still expectations of the Fed cutting interest rates soon, and this factor is still very strong. Gold is in an accumulation phase that could lead to a strong breakout. I still believe the price could reach 5,000 USD/ounce by the beginning of next year," he said.
In addition to policy factors, central bank demand for gold continues to play an important role in supporting prices. The World Gold Council (WGC) recorded that global central banks net bought 53 tonnes of gold in October, up 36% from the previous month and the largest purchase since the beginning of 2025. Analysts said that this official demand reflects the increasing trend of gold reserves in the context of many uncertainties in the global economy and the continued trend of de-dollarization.
In the other precious metals market, silver fell 0.4% to 57.42 USD/ounce, after hitting a historical peak of 58.83 USD/ounce at the beginning of the week. Commerzbank said that the strong increase in silver mainly comes from tight supply, reflected in low inventories on exchanges in Shanghai, and forecasted that silver prices could approach 59 USD/ounce in 2026. Meanwhile, platinum fell 2% to $1,624.20/ounce, while palladium rose 0.7% to $1,434.29/ounce.
Analysts said that in the short term, gold prices may continue to fluctuate within a narrow range until more US economic data and an official decision from the Fed are available. However, the medium-term outlook is still leaning towards an upward trend, thanks to expectations of loose monetary policy and strong safe-haven demand.
