Gold Stalls as Rate Cut Hopes Dim: China’s Hidden Reserves and Tech Scrutiny Emerge

Global financial markets have largely paused, with gold stabilizing near $4,070 per ounce after a short-lived advance of almost 1% earlier in the week. The metal is currently balancing conflicting forces: investors seeking safety have lifted demand, while a firmer U.S. dollar has simultaneously reduced its appeal by raising costs for buyers outside the United States. This quieter trading phase reflects a rapid reassessment of expectations for the Federal Reserve’s final policy meeting of the year. Only a week ago, financial markets were confident that another rate cut was likely. That sentiment has weakened, and derivatives pricing now suggests that the probability of a December cut has fallen to roughly one-third.

Investor uncertainty is being amplified by a shortage of timely federal data releases, leaving policymakers without the labor indicators they typically rely on. Minutes from the Fed’s October meeting showed that officials remain divided, with many arguing that keeping rates unchanged well into 2025 could be necessary to ensure inflation does not become persistent. These conditions have limited gold’s usual advantage in low-rate environments. Even so, the metal remains among the strongest assets of the year, rising more than 50% year-to-date and briefly reaching an all-time record just below $4,400 in late October.

While Western markets dwell on short-term interest-rate decisions, a more significant transition appears underway in Asia. China seems to be accelerating efforts to reduce its dependence on the U.S. dollar by expanding its gold reserves. Although official reports list holdings around 2,300 tons, research by ANZ Bank suggests the true total may be closer to 5,500 tons, due in part to purchases not formally disclosed. This buildup coincides with a decline in China’s exposure to U.S. government debt, which has fallen from more than $1 trillion to about $759 billion. By enlarging the capabilities of the Shanghai Gold Exchange and easing rules for international investment flows, China is moving toward a financial network that places greater emphasis on tangible assets rather than traditional currencies.

Within the United States, attention is shifting toward household financial pressure as the holiday season approaches. The National Retail Federation anticipates that average spending on gifts and food will fall to slightly under $900, reversing last year’s peak. Retailers such as Home Depot have already lowered their sales forecasts, citing weaker housing activity and more careful consumer behavior. In response to the soft spending outlook, President Trump has suggested issuing $2,000 payments to U.S. households funded by tariff collections. Economists note, however, that tariff revenue totaled only about $195 billion last fiscal year—well below what would be required to cover the estimated $600 billion cost of the proposal.

In equity markets, Nvidia’s large deployment of capital has drawn growing attention. This year, the company has invested nearly $24 billion across roughly 60 startups, surpassing the scale of most venture investment seen last year. Analysts are questioning the feedback loop created by these investments: companies such as OpenAI and Anthropic receive funds, then spend significant sums purchasing Nvidia processors. CEO Jensen Huang has framed this approach as building a broader ecosystem, but the overall $53 billion portfolio has prompted debate over whether the tech sector is becoming overheated.

Looking ahead, traders are waiting for the delayed September payroll figures, which will likely set the near-term direction for gold and other risk-sensitive assets. Economists expect an increase of around 50,000 jobs, though a major surprise could disrupt the current calm. For now, market participants are focused on gold’s ability to hold the $4,050 support level. If it remains intact and the labor numbers show weakness, several analysts believe the metal could resume its upward trajectory, with long-term projections still pointing toward a possible move to $5,000 by 2026.