Gold (XAU/USD) pares some of its intraday losses on Friday after fresh comments from Federal Reserve (Fed) officials revive near-term rate-cut expectations. New York Fed President John Williams said he still sees room for a near-term cut, helping the metal recover from an earlier slide.

At the time of writing, XAU/USD is trading around $4,067, after bouncing from an intraday low near $4,022, though it remains vulnerable as the metal continues to oscillate within the range established earlier this week.

Markets had been dialing back expectations for a December rate cut, with most Fed officials striking a noticeably cautious tone in recent weeks. Policymakers have repeatedly warned that inflation remains sticky and that the labour market, while cooling, is still resilient enough to justify a more patient approach.

Against this backdrop, markets now see a 70% chance of a December rate cut, a sharp jump from around 31% earlier in the day. Lower interest rates typically boost demand for non-yielding assets such as Gold.

Market movers: Traders weigh mixed labour data and cautious signals from the Fed
Fed Williams struck a cautious note on the monetary policy outlook, acknowledging that progress on inflation has stalled, even though he still expects price growth to return to the 2% target by 2027. He noted that economic growth has slowed and the labour market has gradually cooled, with downside risks to employment increasing. Williams also said that recent tariffs have added to price pressures but are not expected to generate persistent inflation. He reiterated that monetary policy remains modestly restrict.

Source: Fxstreet